FM urges steel producers to focus on decarbonisation

Finance Minister Nirmala Sitharaman on Monday urged domestic steel producers to focus on decarbonisation and boosting domestic production of specialty steel to reduce dependence on imports. Addressing World Steel Association General Assembly here, the Finance Minister mentioned that the government has introduced the PLI scheme for specialty steel, with an approved outlay of Rs 6,300 crore.

The scheme encourages investment in domestic manufacturing and technology upgradation, helping India to produce more of the specialised steel that its economy needs.

“While much of the global industry is grappling with excess capacity and weak demand, India is experiencing a different trajectory, driven by domestic consumption and sustained investment,” she said.

“For two successive years, consumption has exceeded production, underscoring the strength of the domestic market and the potential for further growth remains substantial,” the finance minister said.

At approximately 109 kg per person, against the world average of 209 kg, she said, India’s steel consumption has considerable room to rise. Demand for steel is driven by the Government’s sustained public capital investment program. Union Government capital expenditure has risen sixfold, from approximately Rs 2 lakh crore in 2014-15, to Rs 12.2 lakh crore in FY27.

With construction and infrastructure accounting for about two-thirds of India’s steel use, this investment directly translates into demand for the metal, she said, adding that public investment gives the industry a sustained domestic market and the confidence to invest in capacity and modernisation.

She outlined five priorities for the steel industry, including reducing production’s energy and carbon intensity while expanding capacity to meet India’s development needs. Sitharaman said greater domestic production of specialty and high-grade steel would support strategic industries and reduce dependence on specialised imports.

She also stressed the need to pursue decarbonisation at a pace consistent with India’s development priorities, requiring credible emissions measurement, technology development and a fair sharing of transition costs. On global trade, the Finance Minister said successive unilateral tariffs merely redirect surplus steel from one market to another.

A lasting solution to global excess capacity requires multilateral disciplines on subsidies that sustain uneconomic production, backed by transparent data, she said.

For India, Sitharaman said, the task is to build capacity for its own development at lower carbon intensity and to regain the leadership in specialty metallurgy that the country possessed in ancient times. She emphasised that for World Steel Association members, India offers the fastest-growing major steel market, with a public investment program and a green steel framework already in place.

Sitharaman also urged the World Steel Association to consider setting up an office in India, citing the country’s emergence as the largest single source of growth in global steel demand.

Noting that the association opened its Beijing office in 2006, when China drove most of the growth in steel demand, she said a stronger presence in India would bring it closer to a key market for incremental demand, technological development, and industrial expansion.

An India office would also help the association strengthen its engagement with fast-growing steel markets in South Asia, Southeast Asia, West Asia and Africa, with which India has longstanding commercial ties, she added.