Heavy Industry in India

From Global Energy Monitor
This article is part of the Heavy Industry Program at
Global Energy Monitor which includes data on iron and steel, cement and concrete, chemicals and iron ore mines.
Sub-articles:

Heavy industry plays a foundational role in India’s economy, contributing significantly to its GDP, employment, and industrial development. The sector’s contribution to India’s GDP has been over 24%.[1] India is projected to undergo a major economic transformation over the next few decades, with surging demand from infrastructure development, housing, and transport. By 2050, steel demand is expected to nearly quadruple[2], cement demand to triple [3], and fertilizer demand to double.[4] Taken together, these industries not only underpin India’s industrial growth and export potential but also play a pivotal role in employment generation, infrastructure creation, and long-term economic resilience.

CO2 emissions by sector, India, 2022, Source: IEA

The industrial sector is also a major source of greenhouse gas emissions, accounting for more than 24% of India’s total emissions.[5] In 2019, 73% of these emissions came from energy use, while the remaining 27% were process-related, stemming from chemical or physical transformations in production. Cement and chemical manufacturing are the largest contributors to process-related emissions, together responsible for nearly two-thirds of this category[6]. Because process emissions are deeply embedded in industrial chemistry, they remain among the most difficult to mitigate, posing significant challenges for India’s decarbonisation pathway. In 2019, the combined emissions from steel, cement, and chemicals sectors reached 678 MtCO2e, accounting for approximately 68% of total industrial sector emissions.[6]

In addition, industry is the single largest consumer of electricity in India, using 595 TWh in 2019, equivalent to 42% of the country’s total power consumption.[7] This demand is met through a mix of grid-supplied electricity and captive generation, much of it still reliant on fossil fuels. These facts highlight two critical imperatives: first, that decarbonising heavy industries is central to India’s ability to meet its climate goals; and second, that scaling up renewable energy and low-carbon technologies is a key lever in the transition.

Cement industry in India

Operating cement capacity by state, Source: Global Cement and Concrete tracker

India’s cement industry is huge with an operating capacity of roughly 714 mtpa, making it the world's second largest cement producer, after China, accounting for nearly 14% of global capacity,[8] (8% according to other sources[9]). The Indian cement sector accounts for about 1.2% of GDP and employs more than 0.5 million people.[10] The industry is concentrated in limestone-rich regions. With its high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth. The Indian cement industry is projected to grow at a CAGR of 5.1% from 2025 to 2030, driven by expansion in residential, infrastructure, commercial, and industrial sectors.[11] The Global Cement and Concrete tracker (GCCT), 2025, tracks a developing cement capacity of 52.4 mtpa in India, with nearly 19% already in construction.[8] The cement production in India s expected to reach 1,546 million tonnes and a per capita consumption to around 877 kg by 2070. The current per capita consumption of cement in Inidia is 257 kg, far below the global average of 540 kg.[9]

Cement is one of India’s largest industrial CO₂ sources. In 2022, cement production emitted roughly 5.8% of India’s CO2, while globally cement accounts for 7-8% of CO2.[12] The total Scope-1 and Scope-2 emissions from the India cement industry in 2020-21 was estimated as 226 million tonnes of CO2, out of which calcination process accounted for 57-60%, process heatinf or combustion contributed 27-30%, emissions from electricity accounted for 10-13% and limestone mining contributed 1-2%.[9]

Production technology

Indian cement is mostly “Portland” cement made in large rotary kilns. Raw materials (limestone, clay) are ground, heated to around 1450°C to produce clinker, which is then blended and ground to produce cement.

India predominantly adopts the dry process in clinker manufacturing for a capacity of 360.8 mtpa and uses wet process for manufacturing 0.7 mtpa of clinker out of the total operating clinker capacity of 369.4 mtpa.[8]

Of the total operating cement capacity in India, around 211.7 mtpa constitute production of Ordinary Portland Cement (OPC) and 347.5 mtpa produces different kinds of blended cements.[8] Over 98% of cement produced in India is grey cement.[8]

Raw materials and fuel

Limestone: Around 80-90% of the raw materials fed into the rotary kiln is limestone.[13] Limestone is one of the most abundant and widely available minerals in India and constitute about 19 billion tonnes of limestone reserves and 228 billion tonnes of resources. Major limestone producing states include Rajasthan, Madhya Pradesh, Chhattisgarh, and Andhra Pradesh.[14] About 69% of limestone in India is cement grade.[14]

Clay: Clay accounts for around 10-15% of the raw material feed.[13]

Coal: Cement industry in India extensively uses petcoke and coal as major fuels for clinker production, accounting for more than 95% of the thermal energy demand.[9]

Alternative fuels like municipal solid wastes, industrial wastes, used tyres, harvested biomass, etc. are increasingly being used as thermal substitution in kilns and pre-calciners, the usage of which still remains at low levels.[9]

Cement decarbonization

  • India's long-term low carbon capacity development strategy in the cement industry has been enhanced use of alternative fuels and raw materials and refuse-derived fuel.[9]
  • The National Council for Cement and Building Materials (NCB) signed two memorandum of understandings (MoUs) to boost sustainability in cement. One with GCCA India promotes joint research on net-zero goals, while the other with AIC-Plasmatech aims to apply Thermal Plasma Torch Technology for cleaner, more efficient production.[11]
  • The cement sector is covered by India’s energy-efficiency PAT scheme (with targets per plant).[15][9]
  • The cement sector will also enter the new Carbon Credit Trading Scheme for CO2 intensity.

ESJ issues

The cement sector in India faces wide-ranging environmental, social, and justice (ESJ) challenges. It is highly carbon- and pollution-intensive, degrading local air quality and public health.[16] Quarrying and plant operations cause serious water and land impacts including erosion, groundwater loss, and farmland destruction. These heighten risks for farmers and forest communities. Workers and nearby residents suffer respiratory illnesses from dust exposure, raising occupational and environmental health concerns. Social conflicts often arise over land rights, inadequate rehabilitation, and lack of consent, particularly affecting marginalized groups.[17] While pollution controls and green technologies exist, weak enforcement and limited community engagement leave vulnerable populations bearing disproportionate burdens. Addressing these issues requires stricter regulation, fairer land-use and consent processes, and stronger protections for workers and communities.

  • In 2025, local communities and youth groups in Meghalaya have repeatedly opposed limestone quarrying proposals and cement project hearings of Topcem, citing threats to water, forest cover, and livelihoods; protests have sometimes turned violent and triggered legal action over unregulated mining.[18]
  • Residents in Mansa village and nearby villages in Punjab publicly opposed a proposed JSW cement plant during regulatory hearings, arguing that a large “red-category” cement unit would harm local health, agriculture and water resources.[19]
  • Large land acquisitions for limestone mining project of Dalmia Cement Bharat Limited in Sudargarh, Odisha triggered tribal marches and protests in 2022, with community groups demanding fair consultation, compensation, and protection of forest and livelihoods.[20]
  • Large cement investment proposals by Adani Cement in Telangana had met with local resistance over fears of pollution and groundwater impacts; activists and civil-society groups have stalled public hearings.[21]

Chemicals industry in India

India’s chemical sector is large and diverse, spanning basic chemicals, petrochemicals, fertilizers, specialty chemicals, dyes and more, and producing over 80,000 commercial products.[22] India is the world's sixth largest producer of chemicals and third in Asia, contributing 7% to India's GDP.[23] India is a world leader in some segments: e.g. 16-18% of global agrochemical production (4th largest) and 15% of dyes production. Exports of chemicals (including petrochemicals) reached Rs. 9.28 lakh crore (US$108 billion) in FY2025.[23] Confederation of Indian Industry (CII) reported that the market size of the chemicals sector in India reached US$ 220 billion in FY2022 and is expected to reach US$ 383 billion by 2030.[24]

Gujarat, Maharashtra, and parts of southern India are major hubs of petrochemical industry with access to refineries, ports and feedstock. Gujarat has emerged as India’s “petro capital” with refinery in Jamnagar and OPaL petrochemical complex in Dahej. Severla companies like Reliance, Shell and ONGC have their manufacturing units in Gujarat.[25]

India's ammonia market is large at 18 Mt (in 2024)[26], and growing as both fertiliser feedstock and an energy vector with emerging interest in green ammonia for fuel and export markets. The industry is expected to grow at a CAGR of 8.2% to reach a volume of 40.22Mt by 2034.[26] India's National Green Hydrogen Mission has set a goal to generate 5 Mt of green hydrogen by 2030. This highlights critical trend in the ammonia market in the country. Currently Ammonia is primarily used in manufacturing of Urea, Diammonium Phosphate and Ammonium Nitrate, indispensable for India's agriculture sector. India produced 28.5 Mt of urea in FY 2022-23, which accounted for 68% of the fertiliser production. Additionally, 9.3 Mt of urea was imported that year.[27]

Methanol market size in India is smaller than ammonia and urea and is estimated to be around US$ 1.63 billion in 2024. The methanol market is expected to grow at a CAGR of 4.872% between 2025 and 2035.[28] The Ministry of New and Renewable Energy is promoting methanol as an alternative fuel for multiple transport applications. Its role is further emphasized in the National Policy on Biofuels, which recognizes methanol’s potential to be produced from biomass, thereby supporting India’s sustainable energy transition.[28]

The chemical industry is an important emitter of GHGs, though its share of India’s CO₂ is smaller than steel or cement. The industry directly contributes to around 4% of India’s greenhouse gases.[24] The total emissions from ammonia production in India was estimated to be around 25 million tonnes of CO2 equivalent in FY2022-23.[27]

Production process and raw materials

The petrochemical sector uses processes like catalytic cracking, polymerization, chlor-alkali electrolysis, etc. Most feedstocks are hydrocarbons (natural gas, naphtha) and energy is a major cost. Most major refinery-integrated projects have or are expanding downstream petrochemicals capacity, reflecting a strategic shift from fuel to higher-value chemicals and polymers.[29][30]

The commercial production of ammonia in India overwhelmingly uses steam-methane reforming (SMR) and Haber–Bosch process, using natural gas or naphtha as the feed. Green pathways substitute electrolyser-based green hydrogen for SMR hydrogen and then produce ammonia via Haber–Bosch process.[27]

India’s existing and proposed methanol plants typically use natural gas reforming routes.

Chemicals decarbonization

  • The National Green Hydrogen Mission will play a key role to scale green ammonia capacity in the country.
  • In May 2024, the India launched a ₹10,000 crore viability gap funding scheme under the PLI program to produce 2 Mt of green ammonia by 2025–26, aligning with its net-zero 2070 goal and aiming to position India as a leader in sustainable ammonia.[26]

Iron and Steel industry in India

Crude steel capacity by state, Source: Global Iron and Steel Tracker

Steel is among India’s most strategic industries. In 2024, India produced 149.4 million tonnes (Mt) of crude steel.[31] Ministry of Steel (MoS) reported a crude steel capacity of 179.515 million tonnes per annum (mtpa) in 2023-24.[32] India holds the second-largest crude steel capacity globally (after China), producing 7.9% of the global crude steel.[33] The steel industry contributes 2% to the country's GDP and employs about 5 lakh people directly and 20 lakh people indirectly.[34] However, the per-capita steel use in India (95.2 kg/person) is far below the global average of 219 kg/person.[35] The domestic demand is expected to keep climbing in the upcoming years. In 2017, the Ministry of Steel devised the National Steel Policy 2017 (NSP 2017) setting a capacity target of 300 MTPA capacity by 2030 to meet the increasing demand.[34] NSP 2017 aims to scale up finished steel per capita use to around 160 kg by 2030-31.[36][37]

The steel industry in India is clustered mostly around mineral rich states including Odisha, Chhattisgarh, Jharkhand and Karnataka. The major producers namely, Steel Authority of India, Rashtriya Ispat Nigam Limited, Tata Steel, ArcelorMittal Nippon Steel, JSW Steel, Jindal Steel and Power Ltd and NMDC Steel Ltd constitute around 60% share in total domestic production.[32]

Construction and infrastructure, capital goods, and automobiles are the largest consumers of steel produced in India and constitute more than 85% of the total domestic steel demand.[2]

Steel production by process, Source: Ministry of Steel

Production technology

Steel in India is produced mainly via three production routes – Blast Furnace-Basic Oxygen Furnace (BF-BOF), Direct Reduced Iron – Electric Arc Furnace (DRI-EAF), and Induction Furnace (IF). In FY2023-24, nearly 43% of crude steel in India was produced using the BOF route, followed by IF (35%) and EAF (22%).

Nearly 65% of the iron production in FY 2023-24 came from blast furnaces and the remaining from DRI.[32] India is one of the world's largest producers of sponge iron,[33] and produced around 52 million tonnes of sponge iron in FY 2023-24.[32] Over 81% of the total sponge iron production in India uses coal-based route.[32]

Raw materials

Iron ore:The production of iron ore in the country increased from 258 Million Tonne in 2022-23 to 275 Million Tonne in 2023-24.[32] Global Iron Ore Mines Tracker, 2025, tracked an operating iron ore mine capacity of over 500 mtpa in India.[38] The country reportedly has iron ore reserves and resources of around 9,481 Mt and 10,519 Mt, respectively.[38]

Coal:The demand of coking coal required for steel sector is only partially met by the domestic production as the supply of high-quality coal/ coking coal (low-ash-coal) in the country is limited. Therefore, the Indian Steel Industry has been largely dependent on imported coking coal. Most of the coking coal produced domestically in the country had a very high ash content making it redundant in the manufacture of steel, which led to import of 51.20 MMT (Million Metric Tonne) in 2020-21, 57.16 MMT in 2021-22, 56.05 MMT in 2022-23 and 58.12 MMT in 2023-24 coking coal. Major portion of this import is from Australia.[32]

Steel Scrap: India announced a Steel Scrap Recycling Policy to enhance the use of steel scrap in steel manufacturing.

Steel decarbonization

  • In December 2024, MoS released ‘Taxonomy of Green Steel’, establishing a framework to promote low-carbon technologies in steelmaking.
  • In September 2024, MoS released a comprehensive Report titled “Greening the Steel Sector in India: Roadmap and Action Plan” based on the recommendations of 14 task forces representing government, industry, academia, and experts. The report outlines strategies across key levers such as energy efficiency, renewable energy, green hydrogen, material efficiency, shifting from coal-based to gas-based DRI, CCUS, and biochar use..[32]
  • Ministry of New and Renewable Energy (MNRE) has launched National Green Hydrogen Mission for green hydrogen production and usage. The steel sector is also a stakeholder in the mission, with ₹455 crore allocated for pilot projects through FY 2029–30. MoS has awarded projects to test 100% hydrogen-based DRI production and hydrogen injection in blast furnaces to reduce coal use.[32]
  • Earlier policy measures include the National Action Plan on Climate Change (2008) and its Perform, Achieve and Trade (PAT) scheme, which sets energy efficiency targets for industries. In steel, PAT targeted savings of 7.334 Mtoe, achieving 6.137 Mtoe, with tradable Energy Saving Certificates (ESCerts) issued to firms exceeding targets.[32]


Other resources

References

  1. ↑ "World Development Indicators | DataBank". databank.worldbank.org. Retrieved 2025-09-02.
  2. ↑ 2.0 2.1 Sinha, Abhas; Acharya, Avinash (2023-01). "India Net Zero Steel Demand Outlook Report" (PDF). theclimategroup.org. Retrieved 2025-09-02. {{cite web}}: Check date values in: |date= (help)CS1 maint: url-status (link)
  3. ↑ GCCA India-TERI (2025). "Decarbonization Roadmap for the Indian Cement Sector: Net-Zero CO2 by 2070" (PDF). teriin.org. Retrieved 2025-09-02.{{cite web}}: CS1 maint: url-status (link)
  4. ↑ "Press Note – FAI Annual Seminar – 2019 on New Approach to Fertilizer Sector" (PDF). FAI. 2019-11-29. Retrieved 2025-09-02. {{cite web}}: |first= missing |last= (help)CS1 maint: url-status (link)
  5. ↑ "India - Countries & Regions - IEA". IEA. Retrieved 2025-09-02.
  6. ↑ 6.0 6.1 Dayal, Shruti; Agarwal, Varun (2025-02). "Pathways to Net Zero: Policies and Measures for Industrial Decarbonization in India" (PDF). WRI India. Retrieved 2025-09-02. {{cite web}}: Check date values in: |date= (help); line feed character in |title= at position 35 (help)CS1 maint: url-status (link)
  7. ↑ "Energy Statistics India 2024" (PDF). Ministry of Statistics and Programme Implementation. 2024. Retrieved 2025-09-02. {{cite web}}: |first= missing |last= (help)CS1 maint: url-status (link)
  8. ↑ 8.0 8.1 8.2 8.3 8.4 "Global Cement and Concrete Tracker". Global Energy Monitor. Retrieved 2025-09-03.
  9. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 9.6 GCCA India-TERI (2025). "Decarbonization Roadmap for the Indian Cement Sector Net-Zero CO2 by 2070" (PDF). TERI India. Retrieved 2025-09-11.{{cite web}}: CS1 maint: url-status (link)
  10. ↑ Jhones, Sarah (2023-10-31). "Cement Industry Profile in India". Reogma. Retrieved 2025-09-03.
  11. ↑ 11.0 11.1 "Indian Cement Industry Analysis | IBEF". India Brand Equity Foundation. Retrieved 2025-09-03.
  12. ↑ "CCUS in the Indian Cement Industry: A review of CO2 hubs and storage facilities" (PDF). GCCA. June 2024. Retrieved 2025-09-03.{{cite web}}: CS1 maint: url-status (link)
  13. ↑ 13.0 13.1 British Geological Survey (2005-11). "Cement raw materials" (PDF). nora.nerc.ac.uk. Retrieved 2025-09-11. {{cite web}}: Check date values in: |date= (help)CS1 maint: url-status (link)
  14. ↑ 14.0 14.1 "Indian Minerals Yearbook 2022 (Part III: Mineral Reviews)" (PDF). Indian Bureau of Mines. 2023-12. Retrieved 2025-09-11. {{cite web}}: Check date values in: |date= (help)CS1 maint: url-status (link)
  15. ↑ "From PAT to CCTS: Can India's New Carbon Market Fix the Past? — Climate Policy Lab". Climate Policy Lab. Retrieved 2025-09-03.
  16. ↑ Anwer, Mohsin; Abdul Moiz, Maaz (2021). "A Review on Air Pollutants from Cement Industry and Its Environmental Impacts in India". International Conference on Advances in Chemical Science and Petrochemical Engineering. Retrieved 2025-09-11.{{cite web}}: CS1 maint: url-status (link)
  17. ↑ Dushyant, Kumar; Walia, Gagandeep Kaur; Devasenapathy, Niveditha (2023). "Lung Function and Respiratory Morbidity Among Informal Workers Exposed to Cement Dust: A Comparative Cross-Sectional Study". Annals of Global Health. 89 (1). doi:10.5334/aogh.4089. ISSN 2214-9996. PMC 10327864. {{cite journal}}: Check |pmc= value (help)
  18. ↑ Reporter (2025-08-26). "Youth body in EJH opposes limestone mining for Topcem - Meghalaya Monitor". Meghalaya Monitor. Retrieved 2025-09-11.
  19. ↑ "Villagers oppose proposed cement plant in Mansa village | Chandigarh News - Times of India". The Times of India. Retrieved 2025-09-11.
  20. ↑ "Tribal march | For land and identity". India Today. Retrieved 2025-09-11.
  21. ↑ "Angry locals stall Adani cement project in southern India". Adani Watch. Retrieved 2025-09-11.
  22. ↑ "India's Chemicals and Petrochemicals Industry: A Global Leader". India Brand Equity Foundation. Retrieved 2025-09-03.
  23. ↑ 23.0 23.1 "India's Chemicals and Petrochemicals Industry: A Global Leader". India Brand Equity Foundation. Retrieved 2025-09-03.
  24. ↑ 24.0 24.1 "Mission Net-Zero: A Strategic Plan for the Indian Chemical Sector | IBEF". India Brand Equity Foundation. Retrieved 2025-09-03.
  25. ↑ "Gujarat emerges as India's 'petro capital'". The Economic Times. Retrieved 2025-09-11.
  26. ↑ 26.0 26.1 26.2 Ranjan, Piyush Gautam, Vishal. "India Ammonia Market Size, Share & Growth Analysis, 2034". Claight Corporation (Expert Market Research). Retrieved 2025-09-11.
  27. ↑ 27.0 27.1 27.2 Kothadiya, Karan; Mallya, Hemant; Yadav, Deepak (2024-09). "Economic Feasibility of Green Ammonia Use in India's Fertiliser Sector" (PDF). CEEW. Retrieved 2025-09-11. {{cite web}}: Check date values in: |date= (help)CS1 maint: url-status (link)
  28. ↑ 28.0 28.1 https://www.marketresearchfuture.com/, Market Research Future,. "India Methanol Market Research Report - Forecast Report 2035". www.marketresearchfuture.com. Retrieved 2025-09-11. {{cite web}}: External link in |last= (help)CS1 maint: extra punctuation (link)
  29. ↑ "OPaL". opalindia.in. Retrieved 2025-09-12.
  30. ↑ "Reliance Industries Limited – Retail Markets | Telecom | Petroleum Refining & Marketing | Petrochemicals | Hydrocarbon Exploration & Production | Jio 4G | Reliance Shares". Reliance Industries Limited. Retrieved 2025-09-12.
  31. ↑ "World Steel in Figures 2025". worldsteel.org. Retrieved 2025-09-02.
  32. ↑ 32.00 32.01 32.02 32.03 32.04 32.05 32.06 32.07 32.08 32.09 Ministry of Steel (2025). "Annual Report 2024-25" (PDF). Ministry of Steel. Retrieved 2025--09-02. {{cite web}}: Check date values in: |access-date= (help)CS1 maint: url-status (link)
  33. ↑ 33.0 33.1 Grigsby-Schulte, Astrid; Khadeeja, Henna; Swalec, Caitlin; Almada, Rolando; Zhang, Ziwei; Zhi, Jessie (2025-05-19). "Pedal to the Metal 2025". Global Energy Monitor.
  34. ↑ 34.0 34.1 "National Steel Policy(NSP), 2017 | Steel Ministry". steel.gov.in. Retrieved 2025-09-02.
  35. ↑ "STEPS TO INCREASE PRODUCTION AND PER CAPITA CONSUMPTION OF STEEL". www.pib.gov.in. Retrieved 2025-09-02.
  36. ↑ "Per capita steel consumption in India at 100 kg, says steel secretary". The Economic Times. Retrieved 2025-09-02.
  37. ↑ "Steel Consumption in the Country". www.pib.gov.in. Retrieved 2025-09-02.
  38. ↑ 38.0 38.1 "Global Iron Ore Mines Tracker". Global Energy Monitor. Retrieved 2025-09-11.
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