Key Takeaways:

• India produced ~151.1 Mt crude steel in FY 2025 with strong demand growth (~149 Mt consumption).

• Circular economy in steel emphasizes scrap use, by-product utilization, and remanufacturing.

• India has supportive policies (NSP, Scrap Policy, PLI) but faces challenges in MSME tech adoption.

• Leading Indian firms (Tata Steel, JSW) and global companies (ArcelorMittal, SSAB) are setting best practices.

• Transitioning to circularity is key for India to meet net-zero by 2070 and remain globally competitive.

INTRODUCTION

India is moving towards being the fastest-growing economy and also steadily advancing toward becoming a global manufacturing hub. To support this vision, the country has introduced various policy initiatives that are aimed at strengthening its industrial sector. At the same time, India is committed to achieving net-zero emissions by 2070. The steel sector is one of the sectors that plays an important role in this journey, and acts as the foundation for industrial development, transportation, and infrastructure while aligning its efforts with the nation’s sustainability goals.

But India being the second-largest producer and consumer of steel globally, accounts for significant carbon emissions due to its heavy reliance on fossil fuels and virgin raw materials. With increasing demand for steel continues to rise in line with economic growth, a more sustainable model of production becomes imperative. This is where the circular economy offers a viable, impactful solution.

WHAT IS CIRCULAR ECONOMY?

The circular economy is a systemic shift from the traditional linear model of "produce, use, discard" to a regenerative model focused on reducing waste, reusing materials, remanufacturing components, and recycling end-of-life products. Steel is exceptionally well-suited to this approach due to its permanent material as it can be recycled indefinitely without loss of quality.

Adopting circular principles allows the steel industry to maximize resource efficiency, minimize environmental impact, and contribute meaningfully to India’s climate commitments under the Paris Agreement. Even small gains in material efficiency and energy efficiency in this high-volume sector can result in significant GHG emission savings.

INDIA’S STEEL SECTOR

In FY 2024–25, India accounted for approximately 7.4% of global steel output, maintaining its position as the world’s second-largest steel producer. Crude steel production reached around 151.1 million tonnes (Mt), supported by a rise in installed capacity to 205 MTPA, a 10% increase from the previous year. Finished steel production was estimated at 145–146 Mt, while domestic steel consumption climbed to about 149 Mt, reflecting a robust 9% year-on-year growth.

Despite this strong performance, India remained a net importer of finished steel, with imports touching ~9.5 Mt, the highest in nine years.

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CORE PILLARS OF CIRCULAR STEEL PRODUCTION

1. Recycling

Steel has been recycled since it was first produced. In a circular model, scrap becomes the primary feedstock, reducing dependence on energy-intensive primary steel. In 2021 alone, 680 million tonnes of steel were recycled globally, avoiding over 1 billion tonnes of CO₂ emissions.

India is gradually formalizing this ecosystem. The Steel Scrap Recycling Policy (2019) provides guidelines for quality processing and aims to reduce imports while encouraging domestic scrap generation. Tata Steel's 500,000 TPA scrap plant in Rohtak and JSW Steel's collaboration with NSL Green Steel are concrete steps towards mainstreaming scrap-based production.

2. By-product Utilisation

The steel industry generates over 20 co-products, including slag, dust, and process gases. These can be converted into valuable inputs for cement, fertilizers, construction materials, or energy generation. For instance, Tata Steel’s Aggreto and Dhurvi Gold are commercialized slag-based products supporting a zero-waste approach.

Water is also efficiently recirculated—up to 90% is reused in steelmaking processes—further strengthening the resource-efficiency framework.

3. Reuse and Remanufacturing

Steel’s inherent durability makes it ideal for reuse. Large infrastructure components like rail tracks can be designed for multiple lifecycle uses such as shifting from high-speed to low-speed lines.

Remanufacturing, unlike simple repair or refurbishment, involves restoring steel-containing products to like-new condition. This is already practiced in construction equipment, vehicle engines, wind turbines, and appliances. This process retains embedded energy, reduces raw material demand, and supports job creation in circular business models.

CHALLENGES AND POLICY INTERVENTIONS

Despite progress, India faces challenges in scaling circularity. MSMEs, which dominate the secondary steel sector, often lack access to better technologies that would lead to less carbon emission.

To overcome these, India has launched several key initiatives:

• National Steel Policy (2017): Focus on scrap-based EAF production, energy efficiency, and waste minimization.

• Steel Scrap Recycling Policy (2019): Formalizes and incentivizes high-quality scrap processing.

• PLI Scheme for Specialty Steel: Encourages production of high-grade recyclable steels with longer life spans.

INDIAN AND GLOBAL EFFORTS MADE

The steel industry plays a crucial role in advancing the circular economy, both in India and globally, by promoting the reuse, recycling, and efficient use of materials. In India, circular practices are gaining momentum through increased reliance on scrap-based steelmaking using electric arc and induction furnaces, supported by policies like the Steel Scrap Recycling Policy (2019) and the Vehicle Scrappage Policy.

India’s major companies, Tata Steel and JSW Steel, are reusing slag, process gases, and by-products in construction, cement, and energy applications. Notable initiatives include steel slag roads and zero-waste steel plants, which are the best examples offor a circular economy. There has been research done to use the steel slag as fertilisers, which is also a great example of a product from waste and supports the nature of circularity.

Global companies like ArcelorMittal, Nucor, SSAB, and POSCO are setting benchmarks by integrating scrap recycling, carbon capture, green hydrogen, and industrial symbiosis into their operations. These circular strategies help reduce environmental impact, conserve natural resources, and move the industry toward more sustainable, low-carbon growth.

India is also adopting the best technologies learned from global leaders so that they can reduce carbon footprints and value addition can be done so that the country can achieve all the targets that are initiated and benefits the country.

CONCLUSION

India’s steel sector holds immense potential to lead the global transition towards a circular economy. By adopting sustainability into design, production, and consumption stages, India can meet rising steel demand without neglecting itsthe environmental goals. Circularity will not only help in cutting emissions and, conservingconserve resources but also make the sector more resilient, cost-effective, and help in global competitiveness.

The policy supports collaborating with industry leaders, technological innovation, and consumer awareness., India is well-positioned to achieve a greener, stronger, and more circular steel economy.