New Delhi: Industry body Confederation of Indian Industry (CII) urged the government to notify a clear Green Public Procurement (GPP) mandate for steel, backed by limited fiscal support, to accelerate demand for low-carbon steel and help India cut industrial emissions, according to a new industry assessment supported by Climate Catalyst.
The study says India is well prepared to adopt a green steel procurement mandate, with both producers and public buyers indicating readiness to scale up certified low-carbon steel if policy clarity is provided. It estimates that a 26 per cent mandate in government-linked projects could unlock up to 16 million tonnes per annum of certified green steel by FY2030, potentially creating the country’s first large-scale assured market for such steel from FY2028.
Public procurement in India is estimated at ₹45–50 lakh crore annually, with government projects consuming around 31.6 million tonnes of steel and generating nearly 70 million tonnes of carbon dioxide emissions in FY2024. The report argues that redirecting a portion of this demand toward certified low-carbon steel would significantly reduce emissions while increasing total project costs only marginally.
The assessment draws on inputs from 28 steel producers covering 88 million tonnes per annum of crude steel capacity and 12 major public procuring agencies. It finds that 93 per cent of producers surveyed are ready to supply certified green steel at scale, subject to the notification of a mandate and transparent cost recovery mechanisms such as a price premium, GST concession or carbon credit offsets.
Public procurers also indicated preparedness to implement such a policy, provided there is a notified national threshold, standardised tender clauses and monitoring templates, basic training for procurement teams and time-bound fiscal support during the initial years.
The report comes as the Union Budget has raised public capital expenditure to ₹12.2 trillion for FY2026-27, reinforcing the infrastructure push. According to the study, aligning a share of this spending with certified green steel could future-proof public assets and avoid higher transition costs later.
CII Executive Director K S Venkatagiri said government demand for certified low-emission steel in infrastructure, housing and transport projects can help narrow the cost gap between green and conventional steel while encouraging investments in cleaner technologies and lowering embodied carbon in the built environment.
Sakshi Balani, Director, India and Director, Policy at Climate Catalyst, said a clear green steel mandate could shift the sector faster than subsidies or standalone technology incentives. She described GPP as a strong demand signal capable of unlocking large-scale investment and building a 16–24 million tonnes per annum green steel market by FY2030.
The study evaluates a 26 per cent mandate for public projects valued above ₹1 crore from FY2028, with a pathway toward 37 per cent after FY2030. Under these scenarios, demand for green steel is projected to rise steadily in line with expanding infrastructure pipelines, supporting investment in steel aligned with the Green Steel Taxonomy.
It also assessed case studies including Pradhan Mantri Awas Yojana-Urban 2.0, Metro Rail systems and Indian Railways projects, finding that the use of green steel would increase total project costs by only 0.2 to 1.2 per cent. A 26 per cent mandate could avoid up to 20.9 million tonnes of carbon dioxide emissions by FY2030, while a 37 per cent mandate could avoid up to 29.7 million tonnes, the report said.
However, the study flags structural challenges such as a projected scrap shortage of 20–30 million tonnes per annum by 2030, limited upstream emissions disclosure and fragmented procurement systems. It recommends a phased rollout beginning with a formal announcement in 2026-27, followed by integration into Schedule of Rates, standardised tender templates, pilot projects and transitional fiscal support to operationalise GPP at scale.
