India's steel sector is entering a decisive new phase — one where expansion and environmental responsibility are being pursued simultaneously, according to a report in The Times Kuwait. The proposed National Steel Policy 2025 sets out an ambitious roadmap to scale crude steel capacity from roughly 168 million tons today to 400 million tons by 2035–36, underpinned by an estimated investment of $183.41 billion.

Scale of Expansion

The targets outlined in the policy reflect the pace at which India's infrastructure development, urban growth, and manufacturing base are being strengthened. The required capital infusion is expected to energise the entire value chain — from mining and transportation through to processing and exports — generating broad industrial momentum across the country.

The sector already contributes approximately 2.5% to India's GDP and supports close to 2.8 million jobs. With expansion plans in motion, employment in the sector is projected to grow substantially, potentially adding over 3 million additional jobs by 2035–36, reinforcing steel's outsized socio-economic role.

The Emissions Challenge

Steel production currently accounts for roughly 10–12% of India's total carbon emissions — a footprint that policymakers acknowledge must shrink. The National Steel Policy 2025 targets a reduction in emissions intensity to 2 metric tons of CO₂ per ton of finished steel by 2035–36, down from the current level of approximately 2.65 metric tons.

This transition is framed as essential to India's broader commitment to achieving net-zero emissions by 2070. Notably, closing even part of that emissions gap will require structural changes to how steel is made — not merely incremental efficiency gains.

Cleaner Production Methods Gaining Ground

Gas-based steelmaking is being actively promoted as a lower-emission alternative to the coal-intensive blast furnace processes that dominate current output. Alongside this, the industry is increasingly pivoting toward scrap-based production, signalling an embrace of circular economy principles where recycling and reuse become central operational strategies.

This dual approach — cleaner primary production and expanded secondary steel from scrap — is designed to reduce dependence on raw materials while cutting the carbon intensity of each ton produced.

Infrastructure as the Enabler

Technology and infrastructure will be decisive in determining whether these targets are met. Expanding gas pipeline networks, securing reliable energy supply, and upgrading industrial systems are identified as prerequisites for scaling cleaner steelmaking capacity across the country.

This comes amid a global push by major steel-producing nations to decarbonise heavy industry, where India — the world's second-largest steel producer — faces both competitive pressure and an opportunity to set new benchmarks for emerging-market industrialisation. How effectively the Centre translates policy targets into on-ground investment will define the sector's trajectory through the next decade.