New steel policy in works as India shifts focus to premium and green steel

New Delhi: India is preparing a new national steel policy with production targets for green steel, speciality steel and stainless steel for 2035 and 2047, officials said.

The revamped framework will focus on premium products and import substitution, while a separate steel scrapping policy is also under inter-ministerial consultation.

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"The current policy is outdated," a senior official told ET, adding the National Steel Policy 2017 (NSP 2017) requires a review before its 2030-31 targets are achieved.

The updated policy is expected to lay out targets for value-added steel products and measures to reduce imports.

NSP 2017, released in May 2017, had aimed to double India's steelmaking capacity to 300 million tonnes per annum by 2030-31. The country's steelmaking capacity rose to 220 million tonnes per annum at the end of FY26, putting the industry on track to achieve the target ahead of schedule.

Domestic crude steel production rose more than 10.7% year-on-year to about 168.4 million tonnes during April 2025-March 2026, while finished steel consumption increased 7.6% to 163.7 million tonnes.

Also Read: India steel sector grows in April, crude output up 5.8%, consumption up 8.1%

“The steel industry has evolved considerably since the 2017 policy was framed,” the official said, adding that the focus has shifted from capacity expansion alone to premium products and life-cycle costing approaches.

The rethink also comes amid rising global overcapacity. The Organisation for Economic Co-operation and Development has projected excess global steelmaking capacity at 721 million tonnes by 2027.

Alongside the new steel policy, the government is also drafting a fresh steel scrapping framework to replace the Steel Scrap Recycling Policy introduced in November 2019.

"While the 2019 steel scrap policy laid the foundation for the recycling sector, there remained a lack of clarity regarding the development and implementation of dedicated recycling clusters," said Keyur Shah, Director at Material Recycling Association of India (MRAI), adding the recycling industry now expects the new policy to provide a clear framework for establishing such clusters with proper infrastructure, logistics support, compliance mechanisms, and ease - of - doing - business for organised recyclers.

"Despite increasing and sizeable investments by formal recyclers, for instance, in modern shredders or processing plants, and recycling infrastructure, India still remains heavily dependent on imported steel scrap due to insufficient availability of domestic scrap," Shah said.

According to official estimates, India will require 70-80 million tonnes of steel scrap when domestic steel production reaches 250 million tonnes.

“This shall require about 700 scrap processing centres, fed by 2,800-3,000 collections and dismantling centres spread all over the country,” the 2019 scrapping policy had projected.