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India is accelerating its steel production growth while embracing the green steel transition. Meanwhile the government is focusing on boosting domestic iron ore and coking coal output to reduce import reliance. Simultaneously, India is addressing infrastructure, cost, and technological challenges to align its steel industry expansion with sustainability and net-zero ambitions.
India’s Steel Industry Accelerates Growth Amid Green Transition and Import Challenges
India’s steel sector has set a benchmark as the country’s steel production witnessed an unusual rise this year. The country’s crude steel production accounted 109 million tonne (Mnt) in January-August 2025 period. This has crossed the 100 million tonne mark within just eight months of 2025.
However, while production is booming, the industry faces pressing challenges related to sustainability and resource dependency. The government’s ambitious infrastructure pipeline, worth over INR 15 lakh crore, is a key driver of this growth, yet it also increases pressure to adopt cleaner, more efficient technologies to meet environmental goals.
Infrastructure Gaps Slowing Green Transition
One major focus is the transition toward green steelmaking. According to a recent report, In India, the cost of producing green hydrogen – a critical component for low-carbon steel – currently stands at $3-5 per kilogram, almost double that of conventional methods. But by 2030, this cost is expected to fall by half amid technological advancements and supportive government policies. Despite this optimism, the industry grapples with limited infrastructure, such as inadequate hydrogen storage, sparse distribution networks, and inefficient scrap collection systems. Altogether, this is putting the domestic steel industry into a hesitation like situation for adopting green technologies in a large-scale.
Policy Initiatives Driving Change
To accelerate the transition, India’s National Green Hydrogen Mission supports the adoption of hydrogen-based Direct Reduced Iron (DRI) methods, Electric Arc Furnaces (EAFs), and Carbon Capture, Utilisation, and Storage (CCUS) solutions. These efforts are aligned with India’s goal to achieve net-zero steel production by 2070.
Addressing Coking Coal Import Dependence
Alongside advancing the green steel transition, India’s government is actively seeking new raw material import sources as well as boosting domestic production of iron ore and coking coal to meet its procurement needs and ensure smooth supply.
India remains highly dependent on coking coal imports, essential for traditional steelmaking. As per market reports, India’s coking coal imports to hit 135 million tonnes by 2030, as domestic production, despite plans to double, won’t suffice to meet demand. Currently, Australia is India’s primary coking coal supplier, followed by the U.S., Canada, and Russia. The government is working to diversify sources, including Mongolia and Mozambique, and boost domestic coal production significantly by 2029-30.
Strategic Balance for Future Growth
In summary, India’s steel industry stands at a critical juncture—balancing rapid growth with sustainability, innovation, and strategic resource planning to meet future demands and environmental targets.
