The draft National Steel Policy Vision 2047 proposes an AI-powered governance framework and advanced data analytics to ensure early detection of abnormal import trends and boost domestic steel industry competitiveness. According to the policy draft, more than 60% of India's steel imports originate from countries with which India has free trade agreements (FTAs). The document emphasizes that measures to discourage import of sub-standard low-quality steel will continue to be taken, including AI-supported import monitoring and other trade remedial measures, while export of good quality steel will also be encouraged. The policy acknowledges that where unfair trade practices are established, timely and evidence-based anti-dumping, countervailing and safeguard measures should be pursued in coordination with the Directorate General of Trade Remedies (DGTR), Department of Commerce, and other stakeholders.
Despite ambitious capacity expansion plans, raw-material security remains a critical challenge for India's steel sector. Steelmaking inputs account for an estimated 65-70% of production costs, with India importing around 92% of its coking coal requirements. The policy seeks to expand domestic mining, improve beneficiation, develop overseas mineral assets and strengthen supply arrangements. However, coking coal requirements are projected to rise from 72 million tonnes to 236 million tonnes by 2047, with the basic oxygen furnace route retaining a 55% share of production. Unless the transition to less carbon-intensive technologies gathers pace, capacity expansion could deepen import dependence and increase emissions. The steel ministry expects iron ore demand to reach 772 million tonnes and plans to secure access to high-grade reserves by pursuing foreign assets and joint ventures.
Finance Minister Nirmala Sitharaman has urged domestic steel producers to reduce carbon emissions and increase production of specialty and high-grade steel to lower India's dependence on imports. Speaking at the World Steel Association General Assembly, Sitharaman highlighted the government's ₹6,300 crore production-linked incentive (PLI) scheme for specialty steel as a key growth driver. She emphasized that for two successive years, consumption has exceeded production, underscoring the strength of the domestic market with substantial potential for further growth. India's steel consumption remains at approximately 109 kg per person, well below the global average of 209 kg, indicating significant scope for demand increase. As per The Times of India, Sitharaman noted that "while much of the global industry is grappling with excess capacity and weak demand, India is experiencing a different trajectory, driven by domestic consumption and sustained investment."
India's steel demand is forecast to grow 7.9% in 2026 and 8% in 2027, reaching 186.2 million tonnes, according to the World Steel Association's Short Range Outlook October 2026. The country's demand is expected to rise to 172.4 million tonnes in 2026, maintaining its position as the world's fastest-growing major steel market. The forecast reflects broad-based demand growth, with infrastructure-led construction continuing to be the key driver, while strong private real estate demand, healthy manufacturing activity and an expanding pipeline of renewable energy projects provide additional support. The expansion of manufacturing capacity is also lifting steel demand from electrical and mechanical machinery segments, with the automotive sector benefiting from domestic demand, export momentum and policy support. The sector is likely to witness an 11.3% rebound in 2027, taking regional demand back to its 2025 level, reflecting the optimistic scenario for India's steel industry.
The policy targets a reduction in emissions intensity from 2.54 tonnes of carbon dioxide per tonne of crude steel to 1.54 tonnes by 2047, while laying the groundwork for achieving net-zero emissions by 2070. The draft proposes greater use of scrap, renewable electricity, hydrogen-based direct reduced iron, and carbon capture, utilisation and storage technologies. Falling renewable-power and storage costs may improve the economics of cleaner steelmaking. Project appraisals must compare the full life-cycle costs of competing technologies rather than assuming that conventional production will remain the cheapest option. The steel sector accounts for an estimated 10-12% of India's carbon dioxide emissions, with average emission intensity of 2.54 tonnes of CO2 per tonne of crude steel, compared with a global average of 1.92 tonnes. The draft also seeks to curb imports of substandard steel through stronger testing, certification and traceability mechanisms, along with artificial intelligence-based monitoring to detect unusual import surges.
India's steel export performance presents a mixed picture, with exports falling from 10.78 million tonnes in 2020-21 to 6.60 million tonnes in 2025-26, while the policy envisages exports of 45 million tonnes by 2047. Achieving this target will require reliable quality, efficient logistics and access to overseas markets. Trade policy must reinforce the transition towards competitiveness, balancing protection against unfair imports with affordable inputs for downstream users. With the EU Carbon Border Adjustment Mechanism linking market access to embedded emissions, producers must factor carbon costs and cleaner technology into decisions on new plants. More countries are likely to adopt similar measures, making cost competitiveness increasingly crucial for export success.
