India Accounts for 42 Percent of Global Steel Capacity Under Development

India is the largest driver of global steelmaking expansion, accounting for 42 per cent — or 357 million tonnes per annum — of all steelmaking capacity under development worldwide, nearly three times China's 112 million tonnes, according to a new analysis by Global Energy Monitor. More than 60 per cent of new coal-based blast furnace capacity under development globally is located in India, even as the country faces growing international carbon pricing pressure through the EU's Carbon Border Adjustment Mechanism.

Globally, 319 million tonnes per annum of coal-based blast furnace capacity has been announced or is under construction, a 5 per cent increase over the previous year. Along with 80 million tonnes slated for relining, these new investments far exceed the 141 million tonnes of operating blast furnace capacity currently scheduled for retirement, resulting in projected net global growth of 88 million tonnes by 2035. Around 93 per cent of India's ironmaking capacity under development relies on coal-based technology, though only about 5 per cent of planned capacity has broken ground, leaving room for policy intervention.

Coal-based steel production accounts for around 88 per cent of steel sector emissions, which itself contributes roughly 11 per cent of global carbon dioxide output. India's steel sector faces additional external pressure: the EU's Carbon Border Adjustment Mechanism, which came into effect in January 2026, could raise Indian steel export costs by 32 per cent. India introduced a Green Steel Taxonomy in 2024 defining green steel as output below 2.2 tonnes of CO2 equivalent per tonne, but analysts say the threshold remains only slightly below the global average for coal-based steelmaking, limiting transformative impact.

Global Energy Monitor analyst Astrid Grigsby-Schulte said India and China plan 86 per cent of new coal-based capacity and hold the power to shift the sector's decarbonisation trajectory. India's dependence on imported metallurgical coal remains a vulnerability, with the country importing nearly three times the coal it produces domestically. Japanese steelmaker JFE Steel plans a $2 billion coal-based joint venture with JSW Steel. The report said India still has a major opportunity to pivot toward green hydrogen-based ironmaking and scrap-based electric arc furnace technology before coal-based projects advance to construction stage.

Key figure — 357 million tonnes per annum