This report was researched and produced by the Confederation of Indian Industry (CII), one of India’s leading industry bodies, with support from Climate Catalyst.
Policy momentum around green steel procurement is building. But a critical evidence gap has remained: how ready are India’s producers and public buyers to actually deliver?
This is one of the first integrated assessments of India’s readiness for Green Public Procurement (GPP) in steel, and it addresses that gap directly. Drawing on primary data from 28 steel producers representing roughly 60 per cent of India’s national crude steel output, and in-depth engagement with 12 of the country’s largest public buyers of steel, the study offers a grounded, evidence-based view of where India stands and what it will take to move forward.
The opportunity India can’t afford to miss
The potential to use public procurement to drive decarbonisation in India is huge. Public projects are valued at approximately US$600 billion annually – nearly one-fifth of India’s GDP. But right now this opportunity is largely untapped.
In 2024 government-linked infrastructure projects consumed 30.6 million tonnes of steel, generating around 78 million tonnes of CO₂ – 21 per cent of India’s total steel-sector emissions. Government decisions on how and where to buy steel don’t just shape infrastructure, they shape the entire trajectory of one of the country’s most emissions-intensive industries.
Strategic adoption of Green Public Procurement (GPP) for steel could create India’s first credible, large-scale demand signal for low-carbon steel and substantially accelerate a transition that’s already underway, but not moving fast enough.
Key findings
1. Even a modest mandate could drive significant emission reductions
Even a modest mandate of 26 per cent green steel in public projects could unlock up to 16 million tonnes of procurement ready certified green steel from primary and secondary steel producers by 2030. Such a measure could avoid up to 20.9 MtCO₂. Meanwhile a more ambitious mandate of 37 per cent would see demand for green steel rise to over 24 million tonnes by 2030. This will help avoid up to 29.7 MtCO₂ of emissions, equivalent to taking up to 9 million cars off the road each year.
The research is clear: the higher the mandate the more significant the growth in green steel demand will be. This will help shift finance towards accelerated demand, including pulling investment into genuinely low-carbon 4 and 5 star Green Steel Taxonomy routes, not just incremental efficiency tweaks.
As such the report recommends the announcement of a 26 per cent mandate from 2028, with a clear, pre-committed pathway to scale this towards 37 per cent post-2030. This clear procurement signal will avoid locking in higher-emission steel assets as the next way is built.
2. A strong public procurement signal will only marginally increase project costs
One of the most striking findings of the report is that – across three case studies of housing, metro rail and freight corridors – introducing a 26 per cent GPP mandate is estimated to only increase overall project costs by a marginal 0.2 to 1.2 per cent. The price premium is real, but it is marginal, while driving meaningful emission reductions.
3. The market is ready for a clear GPP signal
93 per cent of the producers surveyed said they were ready to supply certified green steel once a mandate is issued. They require two things to make this possible: long-term visibility through a notified mandate and a transparent mechanism to recover the incremental cost of decarbonised production, such as a premium, GST concession or carbon credit offset.
While near-term green steel supply is concentrated in the scrap-based secondary sector, integrated producers like Tata Steel, ArcelorMittal Nippon Steel India (AM/NS) and JSW are on track to meet green steel taxonomy thresholds between 2027 and 2030.
Meanwhile, every procuring agency interviewed confirmed they could enforce green steel procurement at scale, provided four enablers are in place: a notified national mandate with clear thresholds; ready-to-use tender clauses and verification templates; brief training for procurement teams; and modest, time-bound fiscal support for the first three years.
Five recommended actions for 2026–27
The policy architecture India needs already exists. General Financial Rules 2017, the Carbon Credit Trading Scheme, and the National Institute of Secondary Steel Technology (NISST) certification framework all provide the foundation. What’s needed now is the will to activate them.
- 1. Notify the mandate: Formally announce a time-bound green steel procurement framework by Q1 2026, with implementation from 2028. Early, credible signalling is what moves investment decisions.
- 2. Harmonise the rules: Standardise tender clauses, verification templates and Schedules of Rates across central ministries, public sector undertakings and states. Without this, national mandates produce patchy compliance, not systemic change.
- 3. Launch high-visibility pilots: Test the system under flagship programmes, PMAY-Urban 2.0, metro rail, Dedicated Freight Corridors. Use the results to refine standard templates ahead of full rollout.
- 4. Deploy time-bound fiscal support: Bridge the early price premium through targeted instruments such as GST relief, preferential margins or carbon-credit offsets which are explicitly designed to taper as costs converge.
- 5. Build governance and transparency: Establish an inter-ministerial GPP Steel Task Force. Mandate upstream emissions disclosure. Publish a public dashboard tracking certified supply, procurement uptake and emissions impact.
Done together, these actions could enable public procurement to absorb 25 to 30 million tonnes of taxonomy-aligned green steel by 2030, representing 15 to 20 per cent of current public-sector steel consumption.
Read the report
An ambitious and implementable GPP mandate is the single most effective near-term lever to translate India’s steel-sector climate ambition into measurable emissions reductions.
This report features a detailed scenario analysis, case studies and recommendations for maximising the impact of a GPP mandate in India. Below you’ll find the executive summary and the complete report, we’ve also summarised these findings in this slide deck.
