India’s Ministry of Steel has published a draft plan for a much larger steel industry by 2047. Stronger domestic demand would absorb much of the expansion, while growth in ore-based steelmaking could keep imported coking coal central to Indian production. The National Steel Policy: Vision 2047 remains open for consultation until 30 October 2026.
Domestic demand and export supply
The draft targets 604 million tonnes of annual crude-steel capacity, against a 220 million-tonne baseline. Finished-steel consumption would rise from 164 million to 505 million tonnes, with consumption per person increasing from 116 kg to 302 kg.
In its 12 October outlook, Worldsteel forecasts Indian steel demand rising 7.9% in calendar 2026 to 172.4 million tonnes and another 8% in 2027 to 186.2 million tonnes, while global demand is forecast to be flat this year. With domestic consumption projected to more than triple by 2047, much of the new capacity is intended for the Indian market. Export volumes will depend on how quickly individual mills expand relative to their domestic orders.
Lower import dependence can still mean more imported coal
The draft projects annual coking-coal demand rising from 72 million tonnes to 236 million tonnes. India currently imports approximately 92% of its requirements.
Using those inputs gives about 66 million tonnes of implied baseline imports. At an illustrative 50% import share in 2047, the larger industry would still require 118 million tonnes from overseas—almost 80% more than the baseline calculation.
Higher-ash domestic coal loses material during washing and needs a suitable blend for coke production. Its cost advantage depends on how much usable coal is recovered and how that blend performs in the furnace, which can preserve demand for imported grades even as domestic mining expands.
JSW acquired Mozambique’s Minas de Revuboè in March 2026, with its first phase targeted to supply around 5 million tonnes of usable coking coal annually from mid-2028. Ownership can reduce reliance on third-party coal purchases, while this overseas supply retains sea-freight and Indian port exposure and remains part of India’s imported tonnage.
More electric steel still means substantial ore demand
The draft’s raw-material model assumes that basic oxygen furnaces account for 55% of steel production. Primary iron makes up 80% of its modelled electric arc furnace charge, through direct reduced iron and hot metal, leaving scrap with a smaller role. Ironmaking therefore remains a substantial source of feedstock demand and production costs across both routes.
India’s projected iron-ore requirement reaches 772 million tonnes annually. Beneficiation and, for relevant routes, pellet production determine how much of that ore becomes suitable furnace feed. Lower iron content and more unwanted mineral material can increase fuel consumption and the flux and slag burden for each tonne of usable iron, raising conversion costs even when the ore itself is cheaper.
Tata Steel’s Kalinganagar site is ramping towards 8 million tonnes of capacity and reported 6.57 million tonnes of crude-steel production in FY2025/26. Rolling and coating capacity determine how much of that growth can be sold as automotive-grade steel.
Ironmaking emissions and export competitiveness
The draft aims to lower average emissions intensity from 2.54 to 1.54 tonnes of carbon dioxide per tonne of crude steel. Coal-based direct reduced iron generates emissions before entering the electric furnace, so expanding electric melting with that feedstock retains emissions from iron reduction. Gas-based reduction or low-carbon hydrogen could reduce those emissions upstream.
For EU-bound steel, higher embedded emissions mean higher potential costs under CBAM. A cheaper ironmaking route can therefore become less competitive on a landed-price basis when the carbon cost outweighs the production-cost saving.
