Key components of this incentive package include promoting green hydrogen and renewable energy sources for steel production, offering financial incentives and subsidies for companies investing in green technologies. Additionally, the package will support the establishment of electric arc furnaces, which are less carbon-intensive than traditional coal-based blast furnaces, allowing manufacturers to reduce their fossil fuel dependency.

This incentive aligns with India's broader objectives to minimize its carbon footprint and lead by example in climate responsibility. The initiative supports the use of renewable power, carbon capture, and recycling to decrease emissions and create a more environmentally responsible steel industry. Green steel production, relying on hydrogen-based methods and scrap-based electric furnaces, also aims to reduce import dependency for critical resources like coal, enhancing energy security and resource efficiency within the industry.

Moreover, as global demand for green steel rises, this package positions Indian manufacturers to remain competitive in international markets that are increasingly enforcing low-carbon mandates. India’s steel industry—among the largest in the world—would benefit from such incentives, facilitating technological advancements and attracting foreign investment into the green steel sector. These incentives are also part of India’s commitment under the National Steel Policy and the Paris Agreement to develop a clean energy ecosystem and reduce overall emissions across sectors.

By encouraging innovative and sustainable practices, the government’s plan is expected to not only stimulate economic growth but also pave the way for a greener industrial future, contributing to India’s stature as a global leader in sustainable steel manufacturing.