India is intensifying its efforts to decarbonize its steel industry, recognizing the sector’s pivotal role in achieving national and global climate goals. The government is implementing policies to promote the production and procurement of green steel, aiming to reduce carbon emissions and foster environmentally friendly practices in infrastructure development.
The Indian government has introduced the Domestically Manufactured Iron & Steel Products Policy-2025, which mandates the use of locally produced iron and steel in government procurement, including capital goods used in their manufacture. This policy applies to all government ministries, departments, and agencies, as well as projects funded by these entities. It requires that all iron and steel procurements exceeding ₹500,000 prioritize domestic products. Additionally, the policy restricts global tender enquiries for procurements up to ₹2 billion, except with approval from the designated authority.Â
To further encourage the adoption of green steel, the Ministry of Steel has proposed a procurement policy mandating that up to 37 per cent of government purchases be low-carbon steel. A star-rating system will assess emissions, with five stars for the lowest. The ministry has also announced a definition for green steel, setting a benchmark for adopting global best practices.
India’s role in global steel decarbonization is significant. According to a report by Global Energy Monitor, India accounts for over 40 per cent of global steelmaking capacity in development, with plans to expand from 258 million tonnes per annum (mtpa) in 2024 to 352 mtpa in 2025. However, construction has commenced on only 28 mtpa, indicating that much of this capacity is still in the planning stages.Â
The report highlights that India’s steel industry remains the most carbon-intensive, emitting about 20-25 per cent more COâ‚‚ per tonne than China. With India responsible for over half of coal-based steelmaking capacity in development (200 mtpa), its actions are critical to global decarbonization efforts. Astrid Grigsby-Schulte, Project Manager of the Global Iron and Steel Tracker at Global Energy Monitor, stated, “India is now the bellwether of global steel decarbonisation. If the country does not increase its plans for green steel production, the entire sector will miss an important milestone.” India’s commitment to green steel is further underscored by the release of the ‘Greening the Steel Sector in India: Roadmap and Action Plan’ by the Ministry of Steel. This comprehensive report outlines the future roadmap for green steel and sustainability, aiming for a net-zero target by 2070. As India continues to invest in infrastructure development, the integration of green steel practices will be essential in balancing economic growth with environmental sustainability.
