The iron and steel industry is a key industry in India. According to a March 2022 Indian Brand Equity Foundation (IBEF) report, India was the second-largest crude steel producer globally as of October 2021. The report further estimated India to produce 120 million tonnes (MT) of crude steel during the fiscal year ending March 31, 2022, which would be about 18% greater than the previous fiscal year’s output. The availability of raw materials like iron ore along with cheap labour have been cited as factors that have fuelled the rise of the Indian steel industry. In terms of Foreign Direct Investment (FDI), government data shows inflows worth $16.1 billion in the metallurgical industries from April 2000 to December 2021. In the coming years, the Indian steel sector is expected to grow significantly. However, in the fight to decrease carbon emissions and tackle global warming, India’s steel sector faces its greatest challenge – a large carbon footprint due to the scarcity of scrap and natural gas. As a result, the steel industry is reliant on iron ore and coal as feedstocks. The industry is highly emissions-intensive, accounting for over a third of all direct industrial CO2 emissions. However, in February, Steel Minister Ram Chandra Prasad Singh said that the Indian steel industry had significantly cut its energy usage and carbon emissions over the years, with its average CO2 emission intensity decreasing from roughly 3.1 tonne/tonne of crude steel (T/ TCS) in 2005 to around 2.6 T/TCS by 2020. The Indian economy has grown as steel consumption has increased. However, India’s per capita steel consumption, which was at 74.7 kg in 2019-20, is modest when compared to the world’s per capita steel usage of 230 kg in 2020. When comparing rural and urban India, the disparity is even more pronounced, with steel usage per capita at 21.5 kg in rural areas and 176 kg in urban areas in 2020-21. With the per capita steel consumption expected to grow in the coming years, the country’s policymakers must also make decisions that reduce carbon emissions from the sector. After the Prime Minister’s announcement of the net-zero emissions objective at COP26, the Steel Association of India (SAI) published a list of policy enablers that would help boost green steel in the country.
10 May 2022
Aarya Haresh Trivedi
