The Ministry of Steel has put out a draft National Steel Policy, Vision 2047, for comment until 30 October. It would replace the 2017 policy, whose horizon ends in 2030-31, with targets of 604 million tonnes (Mt) of crude steel capacity and 505 Mt of finished steel demand by 2047, close to three times today’s levels. Alongside, it proposes a Rs 5,000 crore scheme, Viksit Bharat Ispat, to pay smaller producers incentives linked to output and lower emissions, and it aims to cut the industry’s average emissions from 2.54 to 1.54 tonnes of CO₂ per tonne of crude steel.

The capacity target is the headline, but the draft’s raw-material figures say more about what kind of industry it expects. This piece checks how the 2017 policy is doing, works out from the draft’s own numbers how much steel would come from coal-fired blast furnaces in 2047, and asks whether that fits its emissions goal and the carbon border tax India’s exports will face.

The 2017 policy is broadly on track

The 2017 policy aimed for 300 Mt of capacity and 255 Mt of production by 2030-31. Capacity was 138 Mt in 2017-18 and reached 220.4 Mt in 2025-26, having grown by about 20 Mt a year over the last three years; another 80 Mt by 2030-31 needs 16 Mt a year. Production grew 10.4% a year from 2020-21 to 2025-26, to 170.2 Mt (provisional); reaching 255 Mt needs 8.4% a year. The weak spot is use of the plants: capacity utilisation slipped to about 77% in 2025-26, as capacity grew faster than output.

The 2047 target extends the same pace. Going from 220 Mt to 604 Mt in 21 years means adding about 18 Mt a year, close to what the industry has managed recently. Meeting 505 Mt of finished demand at today’s ratio of finished to crude steel (0.955) needs about 529 Mt of crude steel, or 88% of the planned capacity, assuming imports and exports roughly balance.

*Production implied by this blog: the draft’s 505 Mt of finished demand divided by the 2025-26 ratio of finished to crude steel. Draft figures are as reported by SteelOrbis, Reuters, Business Standard and others; one exam-prep summary gives 214 Mt of coking coal instead of 236 Mt.

What the coal figure says about the route

Steel is made in India in three main ways: in blast furnaces, which turn iron ore into iron with coke made from coking coal; from direct-reduced iron (DRI, or sponge iron), made with non-coking coal or natural gas and melted in electric or induction furnaces; and by melting scrap. Only the blast furnace needs coking coal in quantity. So the draft’s coking-coal forecast implies how much steel it expects from blast furnaces.

India used 72 Mt of coking coal for about 70 Mt of blast-furnace steel in 2025-26 (41% of output in the latest route data), about 1.03 tonnes per tonne. That is above the world average of about 0.78 tonnes cited by the World Steel Association, which fits India’s high-ash coal and its use of coal outside steelmaking. At India’s rate, the draft’s 236 Mt of coal supports about 229 Mt of blast-furnace steel in 2047, 43% of the 529 Mt needed; at the world-average rate, about 303 Mt, or 57%. Either way, the blast furnace keeps or increases its share. The draft’s own scrap projection, 123 Mt by 2047, is about 23% of output, which leaves DRI to fill the rest.

Method: production 529 Mt in each scenario; scrap 123 Mt (draft); DRI is the remainder. Coal per tonne of blast-furnace steel: India 1.03 (the draft’s 72 Mt over 41% of 2025-26 output), world 0.78 (World Steel Association). Last column: the blast-furnace intensity at which the industry averages 1.54 t, if every tonne of DRI steel is gas-based at 1.6 t and scrap steel emits 1.2 t (BigMint’s ranges for India); coal-based DRI, which emits more than blast furnaces, would push it lower. Today’s blast furnaces emit about 2.5–2.7 t.

Coal imports would triple

The draft says India imports about 92% of its coking coal; port data put 2025-26 imports at 66.2 Mt, mostly from Australia, with Russia the main supplier of coal injected into furnaces. At the same import share, 236 Mt in 2047 means about 217 Mt of imports, 3.3 times today. The draft’s answers are more domestic mining and washeries, overseas mines, long-term contracts and better blending. Iron ore is less of a constraint in tonnage, since India is largely self-sufficient, but 772 Mt is 2.7 times the record 289 Mt mined in 2024-25, or about 1.9 tonnes of ore for every tonne of steel not made from scrap, which reflects the low grade of much Indian ore.

The emissions goal needs cleaner blast furnaces, not only more scrap

The table’s last column is the main finding. Even in the best case, with every tonne of DRI steel made with gas and scrap at its planned level, the industry reaches 1.54 t of CO₂ per tonne only if its blast furnaces emit about 1.66–1.68 t, against about 2.5–2.7 t today: a cut of roughly 35–36%. Since most of India’s DRI is coal-based today, the real requirement is tighter. That cut would have to come from capturing carbon, injecting hydrogen or gas into furnaces, or using biomass, none of which is yet in commercial use at scale in India. The draft mentions scrap and hydrogen; as reported, it does not say how much blast-furnace capacity it expects to be fitted with them.

This matters because most of the new capacity has not been built yet. About 384 Mt is to be added by 2047, and plants built in the 2030s will still be running then. The European Union’s carbon border tax already applies to steel: India sent the EU between 2.4 and 4.0 Mt of steel in 2025, depending on the definition, and this blog has estimated the charge at about €93 a tonne with verified emissions data and €270 without. The draft’s export ambitions, and the Rs 5,000 crore emissions-linked scheme for small producers, both depend on the average actually falling.

What would fix this

• The final policy should publish the route mix behind its coal, ore and scrap projections (blast furnace, coal DRI, gas DRI, scrap), so the forecasts can be checked against each other and against the emissions target.
• It should set an emissions ceiling per tonne for new blast-furnace capacity approved after 2030, or require new furnaces to be built ready for carbon capture or hydrogen injection.
• The Ministry should publish emissions per tonne by plant, verified to the standard the EU accepts, so exporters avoid default CBAM values.
• The Viksit Bharat Ispat scheme should pay against measured emissions per tonne, verified independently, rather than on reported technology upgrades.

These are proposals from this blog, not recommendations any agency has adopted.

What this piece could not establish

The draft policy document could not be opened directly; its figures come from news reports and summaries, which give coking-coal demand as 236 Mt (most) or 214 Mt (one summary). The draft’s own assumptions about routes and utilisation were not found. Route shares for 2025-26 are not yet published; this piece uses BigMint’s 41% blast-furnace share for 2024-25. The emission factors by route are industry ranges, not plant data, and the coal per tonne is calibrated from the draft’s current-demand figure, which may include coal used outside steelmaking. Capacity figures for 2018-19 and 2019-20 could not be confirmed and are not shown.

Sources and caveats

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.