Pic credit: Hariom Epoxy Shield

The Indian steel industry is on the verge of a revolution, making capacity expansion crucial. The current finished steel capacity stands at nearly 130 million tonne, with industry estimates targeting around 350 million tonne in the coming years.

Indian steel manufacturers are increasing their installed capacity to meet the growing demand for steel in India,” says Vibhor Kaushik, Managing Director, Vibhor Steel Tubes. He adds, “They are also aiming for higher export targets. Countries in Europe have begun requesting CBAM inputs from Indian suppliers.” This is signalling the growing importance of green steel.

For Ashish Saxena, Plant Head, Unit 2, Naidupeta, MS Agarwal Foundries Pvt Ltd, balancing capacity enhancement with green steel adoption is essential for sustainable growth. He says, “The shift towards green steel is not just a compliance issue but a strategic move to future-proof our operations. We are exploring ways to reduce energy consumption and emissions through waste heat recovery and increased efficiency in existing processes. By aligning our capacity growth with sustainable practices, we ensure long-term viability, lower operational costs, and strengthen our position in an eco-conscious global market.”

Hariom Epoxy Shield balances capacity growth with green steel adoption. Rahul Agrawal, CEO, Hariom Epoxy Shield, explains, “By focusing on energy efficiency, water conservation, and waste reduction in production processes, the company contributes to sustainable growth.” He shares that demonstrating a commitment to environmental responsibility enhances the brand’s reputation and attracts eco-conscious clients, while investing in energy-efficient technologies and optimising resource utilisation leads to significant long-term cost savings for steel producers.

Industry trends

India’s steel industry is booming due to government infrastructure projects and rising demand in construction and automotive sectors.

This offers steel producers a chance to adopt sustainable practices, but Agrawal notes that addressing raw material costs and environmental regulations is crucial for balanced growth.

“At our plant,” says Saxena, “we are optimising production and scaling operations to handle the demand surge.” Modernisation through automation and digitalisation is boosting output and quality, while a focus on higher-grade steel supports the company’s capacity enhancement strategy.

The Government of India has prioritised infrastructure projects, while Kaushik notes that Indian steel manufacturers earned global trust during COVID-19 by supplying steel amid a shortage of Chinese suppliers. He adds, “To meet growing demand, Indian steel companies are expanding, with new players entering the market.”

Policy impact

Spurring tremendous demand for steel products, the list of opportunities is extensive, including the Jal Jeevan Mission, Har Ghar Nal Yojana, Bharatmala, Gati Shakti, Mumbai-Ahmedabad High-Speed Corridor, UDAN Airports, Delhi-Mumbai Industrial Corridor, the development of a 2-lakh km national highway network by 2025, and the expansion of airports to 220.

Saxena highlights that the National Steel Policy 2017 and Production-Linked Incentive (PLI) Scheme offer a solid framework for expanding plant capacity. He notes, “These policies drive investment in technology and infrastructure, boost productivity, and support local sourcing under Atmanirbhar Bharat, enhancing supply chain resilience. Aligning with these policies positions us to boost production and help India become a global steel leader.”

“Green energy is the solution,” says Ram Aggarwal, CEO, Goodluck India Ltd. He explains, “Renewable energy combined with green hydrogen can balance needs with sustainability.” Despite the high cost of green hydrogen, government incentives like production linked incentive (PLI) are encouraging investors such as Reliance and Adani to increase production and lower costs, with Reliance aiming to reduce prices to $1 (Rs 84 per kg) by 2030. The government is also planning a green policy for MSMEs in early 2025 to cut carbon footprints. “The 500 GW renewable energy target must be factored into steel production costs to avoid the impact of a proposed European tax in January 2026. Consumers are willing to pay more if it benefits the environment.”

Agrawal praises the government's efforts to boost steel production but emphasizes the need for a stronger focus on sustainability. He believes, “Policies promoting green steel, like tax incentives for energy-efficient technologies, are crucial for driving the industry towards a sustainable future.”

Production constraints

The industry faces challenges such as high raw material costs, environmental regulations, and technological limitations.

Saxena notes that achieving capacity targets involves overcoming key challenges, including securing high-quality raw materials amid global market fluctuations. He also highlights the need for significant capital investment and a skilled workforce for integrating advanced technologies. Infrastructure issues, such as poor logistics and high energy costs, further complicate efforts. Addressing these requires a holistic approach focusing on operational efficiency, strategic investments, and workforce development.

Agrawal suggests a holistic approach too, to overcome these, focusing on both capacity expansion and environmental responsibility.

There is a lot of variation in input raw materials, mainly because certain months see a significant influx of raw materials imported into India at considerably reduced prices,” says Kaushik. “Sooner or later, this challenge must be overcome by steel manufacturers in India to remain price competitive with imports and address this issue in the long run.”

Eco initiatives

Steel companies in India have already begun considering measures to reduce their CBAM (carbon border adjustment mechanism) and overall carbon footprint. 

Kaushik shares, “Some companies use electric-based production methods, while others are either exploring or already implementing such solutions.” In the future, there are discussions about taxing based on carbon footprints. Therefore, to control costs and contribute to environmental sustainability, he suggests this step be adopted by all steel manufacturers.

Hariom Epoxy Shield prioritises environmental responsibility in its operations. According to Agrawal, the company uses solar power through its captive solar plant. Additionally, it focuses on energy efficiency by implementing energy-saving technologies to reduce their carbon footprint, water conservation by adopting measures to minimise water consumption, and effective waste management practices to reduce landfill waste. Our Naidupeta plant is addressing environmental concerns through energy efficiency and waste reduction,” says Saxena. “We are using advanced filtration to cut particulate emissions, optimising water usage, and investing in renewable energy to reduce reliance on fossil fuels and lower CO₂ emissions. These steps help us meet regulations, position us as a leader in sustainable steel production, and boost operational efficiency.

Green strategies

Relying on solar or electric power for the steel industry requires significant capital expenditure and time. “If the government could provide some incentives or schemes to alleviate the cost burden, this could be achieved sooner and more effectively,” proposes Kaushik.

“Incorporating green steel into our expansion plans involves advanced manufacturing techniques to reduce emissions,” says Saxena. “We prioritise best available technologies (BAT) to boost energy efficiency and minimise our environmental footprint. Through rigorous audits and continuous optimisation, we ensure our expansion meets industry standards and long-term environmental goals.”

Hariom integrates green initiatives into its growth plans, as Agarwal explains: “Investing in R&D for sustainable technologies, training employees for environmentally responsible operations, and collaborating with suppliers who share the company’s commitment to sustainability.”

Sustainable forecast

Capacity enhancement has been ongoing for years. India's production has increased from around 106 million tonnes in 2018 to approximately 140 million tonnes currently, and it is expected to reach 200 million tonnes soon.

Solar projects in India have been driving a shift towards green energy for the past decade, says Kaushik. He notes that the net-zero target is set for 2070. The Steel Scrap Recycling Policy, 2019, increases domestic scrap availability to cut coal use in steelmaking. The Ministry of New and Renewable Energy (MNRE) has also launched the National Green Hydrogen Mission, involving the steel sector in its green hydrogen production and use.

Agrawal sees a promising future of green steel in India, and Hariom Epoxy Shield is committed to playing a pivotal role in this journey.

Saxena views the future of green steel adoption in India as promising, with MS Agarwal Foundries well-positioned to lead this shift. The plant is considering hydrogen-based steelmaking and focusing on developing high-strength, lightweight steel that uses less material and energy. “This strategy meets the rising demand for sustainable materials and boosts our competitiveness in global markets,” he says. By staying ahead of these trends, he believes the plant will be crucial in advancing the industry’s move towards a more sustainable future.

With robust government support, cutting-edge technology, and industry commitment, India is poised to lead the global shift towards sustainable steel production. The time is now – commit to green steel today!

Source: Indian Steel Association, Report: Steel: Shaping the Sustainable Future