Strategic Expansion and Raw Material Security
The Ministry of Steel has released the draft National Steel Policy Vision 2047, outlining a long-term roadmap to expand India’s steelmaking capacity to 604 million tonnes (MT) by 2047. This represents a significant increase from the installed capacity of approximately 220 MT in FY26. The policy also sets an ambitious target to reduce the steel industry’s carbon emission intensity by 39%, aiming for 1.54 tonnes of CO2 per tonne of crude steel by 2047, compared to the current level of 2.54 tonnes.
A central pillar of the draft is addressing raw material vulnerabilities. India currently imports nearly 92% of its coking coal, leaving the sector exposed to global price volatility and geopolitical disruptions. The policy projects coking coal demand to rise from 72 MT in 2025 to 236 MT by 2047. To mitigate this risk, the draft proposes diversifying import sources, expanding domestic coal washing capacity, and securing overseas iron ore assets through joint ventures.
Addressing Global Supply Chain Risks
The proposed measures come amid heightened geopolitical uncertainty, with disruptions from the Russia-Ukraine war and tensions in West Asia impacting shipping and input costs. Industry leaders have highlighted these challenges; Tata Steel estimated a cost impact of approximately ₹1,200 crore in the April-June quarter of FY27 due to the West Asia crisis. Similarly, JSW Steel noted on its Q1 FY27 earnings call that coking coal costs had risen by around $17 per tonne, with an overall cost impact of about $20 per tonne of steel.
To protect margins, which are heavily influenced by raw materials accounting for 65–70% of total costs, the draft emphasizes technology-driven efficiency. This includes adopting artificial intelligence and advanced analytics for coking coal blending to optimize diverse imported grades and monitor supply vulnerabilities.
Emissions Reduction and Scrap Utilization
The policy seeks to decarbonize the sector, which currently accounts for 10-12% of India’s total CO2 emissions. The roadmap includes improving energy efficiency, increasing renewable electricity use, and promoting scrap-based steelmaking. Steel scrap consumption is projected to increase from 36 MT in FY26 to 123 MT by 2047.
To support this, the draft proposes a mission-mode scrap collection initiative, modeled on the Swachhata Abhiyan, to channelize scrap from households, industrial assets, and end-of-life vehicles into formal recycling. Additionally, the policy identifies the modernization of smaller secondary steel producers and the development of speciality steel for defense, automobiles, and power equipment as key priorities.
Logistics and Infrastructure Enhancements
Recognizing that iron ore demand will rise from 299 MT in 2025 to 772 MT by 2047, the draft proposes expanding slurry pipelines to transport iron ore in a water-based mixture. This aims to reduce reliance on road and rail transport, thereby improving logistics efficiency. The policy also includes a dedicated safety framework to strengthen audits, accident reporting, and emergency preparedness across the industry.
The Ministry of Steel has invited public comments and suggestions on the draft until October 30, 2026. This new vision supersedes the 2017 policy target of 300 MT capacity by 2030-31, establishing a more comprehensive framework for global competitiveness and environmental performance.