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Draft National Steel Policy: 604 MT capacity, cleaner steel by 2047

By CAShorts DeskPublished Source: Ministry of Steel, draft National Steel Policy – Vision 2047 (steel.gov.in); Business Standard, 11 Oct 2026

Draft National Steel Policy: 604 MT capacity, cleaner steel by 2047
Illustration (AI-generated)

The Ministry of Steel has posted a draft National Steel Policy – Vision 2047 to replace the 2017 policy. It targets 604 million tonnes of crude steel capacity by 2047, against 220 million tonnes in 2025-26, and a cut in emission intensity from 2.54 to about 1.54 tonnes of CO2 per tonne of crude steel.

Syllabus: GS3 · Indian Economy & Growth; Prelims · Environment & Ecology; GS3 · Liberalisation & Industry

Why it matters

A family building a house, a carmaker and a railway contractor all pay for steel, and raw materials make up 65-70% of its cost. Because India buys about 92% of its coking coal abroad, a price spike or supply cut overseas raises the cost of every beam and car body made in blast furnaces; washed domestic coal, overseas mines and more scrap spread that risk. Emissions matter as much. At 2.54 tonnes of CO2 per tonne, Indian steel is dirtier than the world average of 1.92, and the European Union's Carbon Border Adjustment Mechanism (CBAM) makes importers pay for the carbon embedded in steel. Cleaner steel keeps export markets open and supports India's 2070 net-zero goal.

Prelims pointers

  • Blast furnace-basic oxygen furnace (BF-BOF): coke reduces iron ore to molten hot metal; the basic oxygen furnace then blows oxygen to burn off excess carbon.
  • Direct reduced iron (sponge iron): iron ore reduced in solid form by natural gas, coal or hydrogen, then melted with scrap in electric arc or induction furnaces.
  • Hydrogen-based direct reduction: hydrogen replaces carbon as the reducing agent, so the by-product is water vapour instead of carbon dioxide.
  • Anti-dumping duty: on imports sold below normal value that injure domestic industry; DGTR (Department of Commerce) investigates, the Ministry of Finance imposes.
  • Safeguard duty: temporary duty against a sudden import surge causing serious injury; needs no proof of unfair trade; WTO Agreement on Safeguards.
  • Countervailing duty: offsets subsidies given by the exporting country's government; WTO Agreement on Subsidies and Countervailing Measures.
  • CBAM: European Union charge on carbon embedded in imports of iron and steel, aluminium, cement, fertilisers, electricity and hydrogen.
  • Ministries: SAIL and NMDC Limited are CPSEs under the Ministry of Steel; Coal India and its subsidiary Bharat Coking Coal Limited are under the Ministry of Coal.

Practise a UPSC-style question

With reference to raw materials for steelmaking in India, consider the following statements:

1. India depends on imports for most of the iron ore its steel industry uses.

2. Coke made from coking coal acts as the reducing agent for iron ore in a blast furnace.

3. Limestone and dolomite are added as fluxes that carry away impurities as slag.

Which of the statements given above is/are correct?

  1. (a) 1 and 2 only
  2. (b) 2 and 3 only
  3. (c) 1 and 3 only
  4. (d) 1, 2 and 3
Show the answer

Answer: (b) 2 and 3 only

1 is incorrect: India is largely self-sufficient in iron ore; it is coking coal that is about 92% imported. 2 is correct: coke supplies the carbon that strips oxygen from iron ore in the blast furnace. 3 is correct: limestone and dolomite are fluxing agents that bind impurities into slag.

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