On 10 October 2026, the government released the draft National Steel Policy: Vision 2047 for public consultation, with ambitious targets. The vision projects steelmaking capacity to surge from the current 220 million tonnes to 604 million tonnes by 2047, while crude steel production is expected to reach 531 million tonnes (up from 164 million tonnes in 2025). The policy also projects annual iron ore demand of 772 million tonnes, coking coal demand of 236 million tonnes and scrap consumption of 123 million tonnes.
India’s crude steel production For dry bulk shipping, the key question is not whether India can produce more steel. The country has established itself as the world’s second-largest steel producer. The more important question is whether India can secure the enormous quantities of raw materials required to support this expansion, and where those raw materials will come from.
In our previous analysis, we had highlighted that India’s iron ore market was undergoing a structural transition. As domestic steelmakers are absorbing a larger share of locally produced ore, exports are declining and imports are rising. Iron ore exports fell from 52 million tonnes in 2020 to 27 million tonnes in 2025, while imports increased to more than 12 million tonnes. The shift was beginning to support longer-haul imports from Brazil and increasing the role of Capesize vessels in India’s import trade.
The new policy suggests this trend could accelerate considerably. India produced a record 289 million tonnes of iron ore in FY2024-25 compared to 204 million tonnes in FY2020-21. While the country has one of the largest iron ore reserves in the world, increasing annual production to a level capable of supporting 772 million tonnes of demand would require unprecedented expansion in mining, beneficiation, rail infrastructure and slurry pipelines.
Even under an optimistic scenario, domestic production may struggle to keep pace with the steel sector’s expansion. If India manages to increase iron ore production to around 550-600 million tonnes by 2047, the country could still face a supply gap of 170-220 million tonnes annually. Under such a scenario, iron ore imports are likely to approach 200 million tonnes per year, transforming India from a marginal importer into one of the world’s largest iron ore destination markets. At the same time, exports could become negligible as domestic steelmakers consume increasing quantities of fines and lower-grade ores that were previously exported.
However, the relationship is becoming increasingly complicated between steel production and demand for raw materials because of changes in steelmaking technology. A transition towards electric arc furnaces (EAFs) appears bearish for iron ore and coking coal demand because traditional EAF steelmaking is primarily based on scrap. This is largely true in Europe and North America, where electric furnaces are fed predominantly by recycled steel.
India is different Many Indian EAF and induction furnace operators rely heavily on direct reduced iron (DRI), commonly known as sponge iron, alongside scrap. Unlike scrap-based steelmaking, DRI production still requires substantial quantities of iron ore. In India, much of this DRI is produced through coal-based processes, meaning that a shift towards electric furnaces does not eliminate raw-material demand in the same way it does in mature scrap-rich economies.
This distinction is important because it explains why the government’s projections still show strong growth in iron ore and coking coal requirements despite a possible shift towards EAF.
The draft policy expects scrap consumption to expand from 36 million tonnes in FY2025-26 to 123 million tonnes by 2047, equivalent to around 21% of projected crude steel production. The government also expects domestic scrap collection to rise substantially through vehicle recycling, ship recycling and a more formalised scrap collection industry.
Nevertheless, scrap availability is unlikely to remove the need for large-scale imports of steelmaking raw materials. India currently consumes more scrap than it generates domestically and already relies on imports. Several industry studies suggest that global scrap availability may tighten over time as major exporting countries retain more material to support their own decarbonisation efforts.
The government’s own projections acknowledge this limitation. Despite the increase in scrap consumption to 123 million tonnes, the policy still expects iron ore demand to reach substantial amounts by 2047.
Coking coal may ultimately become as important a shipping story as iron ore. Drewry forecasts India’s coking coal imports to rise from 68.6 million tonnes in 2025 to 80.3 million tonnes by 2031. However, the draft steel policy projects total coking coal demand of 236 million tonnes by 2047. Currently, India imports around 92% of its coking coal requirement, and its import needs could increase dramatically even if domestic production and coal washing capacity improve.
Assuming import dependence declines moderately to 80-90%, India’s annual coking coal imports could reach 190-210 million tonnes by 2047. That would be more than triple current import levels and establish India as the dominant source of incremental seaborne coking coal demand globally.
The source of these imports will determine the full shipping impact. Brazil appears well-positioned to increase its share of India’s iron ore imports as demand for higher-grade ore rises. Guinea’s Simandou project could become another important supplier as its 120 million tonnes of planned exports gradually enter the market. The proposed Central African Republic-Kribi corridor could create an additional source of Atlantic Basin iron ore supply if the project progresses as planned. We previously estimated that the corridor could support more than 90 million tonnes of annual exports and generate demand for 70-80 Capesize vessels.
Long-haul imports from Brazil, Guinea, and potentially Central Africa are likely to boost tonne-mile demand more than Australian cargoes. This would strengthen Capesize utilisation and increase demand for vessels across the market.
The coking coal trade could have an even broader impact on the fleet. Australia is likely to remain India’s largest supplier, but rising imports from Canada, the US and Mozambique could create additional opportunities for both Capesize and Panamax vessels. Meanwhile, any increase in scrap imports would generate employment for Handysize and Supramax ships.
Conclusion India’s Steel Vision 2047 is ultimately a shipping story. The policy projects greater use of scrap, increased electrification and lower-emission steelmaking technologies. However, unlike Europe and North America, India’s electric steel sector remains closely linked to direct reduced iron production, meaning that demand for iron ore and coal is likely to remain substantial even as EAF capacity expands.
If India achieves the ambitions outlined in the draft policy, iron ore exports could largely disappear. At the same time, growing scrap requirements could create an additional import market.
Even though China will remain the world’s largest iron ore importer for the foreseeable future, its steel market is increasingly mature. Meanwhile, India is still in the early stages of a multi-decade industrial expansion. If India achieves its 2047 targets, it could become the largest source of incremental seaborne demand for steelmaking raw materials and one of the most important long-term growth drivers for the global dry bulk shipping market. Source: Drewry