The industrial sector is on track to become India’s largest carbon emissions source by 2040, with the iron and steel sector being the country’s largest carbon-emitting industrial sector.

As the world’s second-largest producer of crude steel and a rapidly growing economy, India faces the challenge of meeting increasing steel demand while transitioning to less carbon-intensive production methods.

“For India to achieve its net-zero emissions target by 2070 and the world to meet the climate goals under the Paris Agreement, industries must shift to less carbon-intensive means of production and gradually align to net-zero/carbon-neutral pathways.”

This discussion paper provides a comprehensive framework and actionable recommendations for scaling transition finance to support the green industrial transition of India’s iron and steel sector, addressing both the needs of primary and secondary steel producers.

Key recommendations include:

• Develop and implement a national sustainable finance taxonomy defining green and transitional activities


• Harmonize taxonomy with sectoral transition pathways while ensuring interoperability with other jurisdictions


• Mandate disclosure of corporate transition plans with standardized credibility assessment guidelines


• Design and implement green industrial policies for the iron and steel sector


• Develop sectoral transition pathways and technology roadmaps to transition to net-zero emissions

The path forward, a strategic opportunity for green steel

• India’s steel sector transition offers an economic opportunity. With strategic financing, policy support, and industry commitment, India can become a global leader in low-carbon steel production while maintaining its competitive edge.


• This discussion paper represents the beginning of a journey, not the destination. The recommendations outlined provide a framework for action, but success depends on collaborative efforts across financial institutions, policymakers, industry leaders, and civil society.


• By mobilizing transition finance at scale, we can transform one of India’s most essential and emissions-intensive sectors into a cornerstone of its sustainable economic future.