How Indian steelmakers can treat ferrous scrap as a strategic resource

India’s green steel pathway hinges on how strategically scrap is integrated across production, reporting and finance.

In brief

• Scrap usage in the Indian steel sector remains below global benchmarks, despite its strong potential to reduce emissions and input costs.
• Tightening scrap imports and global supply constraints are elevating scrap from a traded commodity to a strategic resource.
• Scaling scrap-based steelmaking in India can materially support the country’s ambition of net zero steel.

As India accelerates its transition towards sustainable industrial growth, the steel sector finds itself at the centre of the decarbonization challenge. Accounting for a significant share of national industrial emissions, steelmaking must balance rising demand with climate commitments. Against this backdrop, steel scrap has emerged as one of the most immediate and scalable solutions to lower emissions while strengthening resource security.

The current pattern of India's steel scrap utilization reflects both progress and untapped opportunities. Scrap already plays a meaningful role in induction furnaces, electric routes and foundries, yet India’s overall scrap share in crude steel production remains well below the global average. This gap is largely driven by the continued dominance of ore-based routes, particularly BF-BOF steelmaking, and by structural limitations in domestic scrap collection, processing and quality assurance.

Globally, scrap-intensive systems dominate low-carbon steel production. In contrast, India’s steel ecosystem is still evolving towards higher circularity. While electric arc furnace capacity is expanding, many units continue to rely heavily on direct reduced iron to manage quality and supply risks. Enhancing scrap availability and consistency is critical to unlocking the full emissions benefits of electric steelmaking.

The climate rationale is clear. The role of scrap in decarbonising steel lies in its ability to bypass the most carbon-intensive stage of production— ore-based ironmaking. Even a modest increase in scrap charging rates can deliver immediate reductions in energy use and emissions, without requiring breakthrough technologies. For integrated producers, higher scrap use in basic oxygen furnaces offers a near-term pathway to cut sectoral emissions while existing assets continue to operate.

However, supply-side challenges remain acute. As one of the world’s largest scrap importers, India’s domestic producers remain exposed to price volatility and geopolitical risks in the global scrap trade. As major exporting regions tighten controls to prioritise domestic decarbonization, reliance on imports is becoming increasingly uncertain. Strengthening steel recycling in India is therefore no longer optional—it is a strategic necessity.

Policy interventions over the past decade have laid an important foundation. Vehicle scrappage, ship recycling and formal scrap-processing frameworks are gradually increasing domestic availability. Yet the next phase must focus on utilisation, quality and integration. Without coordinated action across collection, dismantling and processing, efforts to scale India’s green steel scrap potential will remain limited by fragmented supply chains and inconsistent material flows.