India's steel ministry has requested ₹150 billion (approximately $1.74 billion) from the upcoming federal budget to incentivize the production of low-carbon steel, according to two government sources familiar with the matter. Finance Minister Nirmala Sitharaman is scheduled to present the budget for the 2025-26 fiscal year on February 1.
As the world's second-largest steel producer, India is working on a green steel policy aimed at decarbonizing steel production, aligning with Prime Minister Narendra Modi's commitment to achieving net-zero emissions by 2070. The proposed incentives are intended to reduce emissions, enhance research and development, improve raw material efficiency, and encourage banks to offer lower interest rates on loans for renewable energy projects.
The steel ministry aims to implement these incentives until 2030, with a proposal set to be submitted for cabinet approval once funding is allocated. Recently, the government defined 'green' steel as that produced with carbon dioxide emissions of less than 2.2 metric tons per ton of finished steel. Currently, Indian steel producers emit about 2.55 metric tons of CO2 per ton of crude steel, which is significantly higher than the global average.