India’s Draft Steel Policy Targets 604 MTPA by 2047, A 384 MTPA Capacity Addition That Hinges on Demand, Raw Materials and Utilization 

Ministry of Steel’s Vision 2047 projects crude steel production of 531 million tonnes and exports of 45 MT, but current capacity utilization of 77.6% against an assumed 88% target highlights the gap between installed capacity and actual output 

India’s Ministry of Steel has released a draft National Steel Policy – Vision 2047 proposing a substantial expansion of the country’s crude steelmaking capacity, from approximately 220 million tonnes per annum (MTPA) to 604 MTPA by 2047. As a draft proposal, these figures represent the sector’s proposed direction rather than confirmed government commitments, and remain open to stakeholder review. 

The draft envisages crude steel production reaching 531 million tonnes, finished steel consumption rising to 505 million tonnes, and per-capita finished steel consumption climbing from 116 kg to 302 kg by 2047. Achieving these targets, according to the policy document, will require coordinated progress across steelmaking capacity, raw-material supply chains, infrastructure, investment and technology adoption. 

A Significantly Larger Ambition Than the 2017 Roadmap

India’s National Steel Policy 2017 had established a roadmap targeting 300 MTPA of crude steel capacity, 255 million tonnes of crude steel production, and 230 million tonnes of finished steel production by FY2030-31.  

The new draft extends this ambition considerably further, building on genuine progress already made: India’s crude steel production rose from approximately 89 million tonnes in FY2014-15 to 170.15 million tonnes in FY2025-26, while finished steel consumption grew from around 77 million tonnes to 164.36 million tonnes over the same period, with installed crude steel capacity reaching 220.41 MTPA. 

The next phase represents a considerably larger undertaking. Moving from 220 MTPA to 604 MTPA requires adding a net 384 MTPA of capacity translating to average net additions of approximately 17 to 18 MTPA annually over roughly 22 years. The pace of actual additions, the draft notes, will depend on investment decisions, regulatory approvals, commissioning schedules and prevailing market conditions. 

Demand Growth Will Determine the Pace of Expansion

Steel capacity generates commercial value only when matched by sufficient market demand. The draft’s projection of 505 million tonnes in finished steel consumption by 2047 depends on sustained growth across infrastructure, housing, transport, power transmission, industrial construction and manufacturing sectors. 

India’s ongoing urbanization is cited as a strong potential foundation for this demand, with housing, highways, railway networks, metro systems, airports, industrial corridors and commercial construction all requiring steel inputs.  

Expanding manufacturing activity could further drive consumption through machinery, automobiles, engineering goods and capital equipment. However, these opportunities translate into actual demand only if infrastructure and industrial projects progress at their expected pace alongside continued broader economic growth. 

Exports represent a secondary avenue for growth, with the draft targeting steel exports of 45 million tonnes by 2047, up sharply from 6.60 million tonnes of finished steel exported in FY2025-26. Export growth, however, will depend on product quality, production costs, freight rates, trade measures, and competitive dynamics with other steel-producing nations.  

The draft emphasizes that domestic consumption will remain central to the overall vision, with export markets serving a complementary rather than primary role. 

Capacity Utilization: The Critical Variable

The draft policy assumes capacity utilization of approximately 88%, combined with average annual GDP growth of around 7%. At 604 MTPA of installed capacity, utilization at this level would generate approximately 532 million tonnes of crude steel production broadly consistent with the draft’s 531 million tonne target. 

This assumption highlights an important distinction between installed capacity and actual production. Reported capacity utilization stood at approximately 77.6% for finished steel between April and October 2025, illustrating a meaningful gap between current operating conditions and the draft’s underlying assumption.  

Closing this gap, according to the policy, will require dependable raw-material supplies, reliable energy access, efficient logistics, productive operations and sufficient market demand. New plants may also require time to reach intended output levels, while older facilities may need modernization to remain competitive. 

Given this dynamic, the draft suggests that Vision 2047’s success should be assessed not solely by installed capacity figures, but by actual production volumes, operating efficiency, product quality, and the ability of Indian steelmakers to compete in both domestic and international markets. 

Raw-Material Requirements Set to Rise Substantially

Supporting this scale of production growth will require considerably larger quantities of raw materials. The draft projects iron ore requirements rising from 299 million tonnes in 2025 to 772 million tonnes by 2047, while coking coal requirements are expected to increase from 72 million tonnes to 236 million tonnes over the same period.  

The draft also projects requirements of approximately 34 million tonnes of manganese ore (up from roughly 11 million tonnes), 77 million tonnes of limestone (up from 24 million tonnes), and 51 million tonnes of dolomite (up from 9.2 million tonnes). 

While India possesses a substantial domestic iron ore resource base, the draft notes that meeting higher demand will require careful assessment of mine-level production, ore quality, beneficiation capacity, environmental approvals and transportation infrastructure, since mineral resources in the ground do not automatically translate into material delivered to steel plants at the right time and cost. 

Coking coal presents a distinct challenge, with the draft reporting import dependence of approximately 92%, leaving the industry exposed to international price volatility, shipping disruptions and supplier availability constraints. Supplier diversification, improvements in domestic coal washing, and more effective blending practices are identified as important mitigating measures. Other inputs, including manganese ore, limestone, dolomite, ferroalloys and scrap, will similarly influence production costs and the industry’s ability to manufacture varied steel grades. 

Infrastructure Must Expand in Parallel

The draft emphasizes that mines, processing facilities, ports and steel plants must be connected through reliable rail, road and material-handling systems. Its focus on expanding iron ore slurry pipelines reflects the need to transport bulk materials more efficiently at the volumes envisaged.  

Should logistics capacity fail to keep pace with production growth, the draft warns, resulting bottlenecks and elevated transportation costs could undermine the competitiveness of newly added capacity, underscoring the need for steel expansion and raw-material infrastructure to be planned in tandem. 

Emissions Reduction Target Runs Alongside Capacity Growth

Vision 2047 is not framed solely around production volume. The draft targets reducing emissions intensity from 2.54 tonnes of CO2 per tonne of crude steel to 1.54 tonnes by 2047, a reduction of approximately 39%.  

Achieving this alongside substantial production growth will require investment in energy efficiency, process improvements, greater scrap utilization where suitable, waste-heat recovery, and lower-emission production technologies. 

Direct reduced iron and electric-arc furnace routes are cited as potential contributors to this transition, contingent on the availability and cost of suitable ore, scrap, gas and electricity, while existing blast-furnace-based facilities will need to improve efficiency and evaluate appropriate decarbonization pathways.  

The pace of this transition is expected to vary across producers depending on technology readiness, financing availability and infrastructure access. The draft additionally points to developing specialty steel, modernizing the secondary steel sector, and strengthening domestic steelmaking technology capabilities as means of improving productivity while reducing reliance on imported technology and equipment. 

What Will Determine Success by 2047

According to the draft policy, India’s proposed 604 MTPA capacity target represents a major industrial ambition whose achievement depends on several conditions converging, domestic demand must absorb additional production, raw-material supply chains must expand accordingly, infrastructure must support substantially larger volumes, and steelmakers must simultaneously improve utilization rates while investing in cleaner production technologies. 

The policy document suggests that further analysis is needed at the supply-chain level examining mine-level iron ore availability, coking coal import dynamics and washing yields, other critical steelmaking inputs, scrap recovery systems, trade exposure, and logistics capacity, all of which will influence the cost and reliability of future production.  

While India has already demonstrated its capacity to expand steel production substantially over the past decade, the draft frames the task ahead as sustaining that growth at a considerably larger scale, while ensuring new capacity remains productive, commercially viable and environmentally responsible. Vision 2047, the policy concludes, will ultimately be measured not by the capacity India announces, but by how much competitive, marketable and lower-emission steel it can reliably produce. 

About Price Watch™

Price Watch™ delivers independent steel price assessments and market intelligence covering India’s evolving steel industry and its long-term growth ambitions under the Indian Steel 2047 Vision. The platform provides weekly price assessments, raw material analysis, supply-demand intelligence, production and plant outage monitoring, trade flow analysis, energy-cost tracking, freight intelligence, inventory analysis, and short- and long-term price forecasts across finished steel products, semi-finished steel, iron ore, coking coal, and other key steelmaking inputs. 

By combining independent price reporting with market analysis and forecasting, Price Watch™ helps procurement teams, steel manufacturers, traders, distributors, infrastructure developers, and other industry participants evaluate replacement costs, monitor supply risks, assess market competitiveness, and make informed sourcing and risk management decisions.  

As India advances towards its 2047 steel industry ambitions, Price Watch™ supports stakeholders in understanding pricing dynamics, raw material availability, capacity expansion, infrastructure-led demand, decarbonisation, and emerging opportunities across the domestic and global steel value chains. 

Follow Price Watch™ on LinkedIn for real-time steel market updates, commodity price trends, raw material intelligence, capacity expansion developments, supply-chain disruptions, decarbonisation insights, and market analysis relevant to India’s evolving steel industry and its long-term vision for 2047.