Ahead of Union Budget, 5 industry & policy groups call for strong demand mandate & enabling fiscal support for green steel public procurement

Joint call from Confederation of Indian Industry, Climate Catalyst, Global Efficiency Intelligence, UC Berkeley’s India Energy and Climate Center and Xynteo

Ahead of the Union Budget, a group of five leading industry and policy organisations working on steel decarbonisation have jointly called for a clear demand mandate, supported by targeted fiscal measures, to enable the effective rollout of low-carbon steel procurement across public infrastructure projects.

Public procurement remains one of the largest sources of steel demand in India, accounting for 22-25% of total consumption across roads, railways, metro systems, housing and urban infrastructure. As the Government of India advances work on green steel policy frameworks, policy and industry practitioners emphasise the importance of demand-side certainty, with aligned procurement rules and budgetary provisions.

Why budget alignment matters

India has already taken an important early step by becoming one of the first countries in the world to develop a Green Steel Taxonomy, providing clarity on what constitutes low-carbon steel. From a policy perspective, the next phase should focus on translating this clarity into demand, with Green Public Procurement (GPP) serving as the primary instrument for market creation.

Procurement mandates, supported by well-designed procurement systems, play a powerful role in creating predictable demand for low-carbon steel. Updating tender frameworks to specify low-carbon steel and clearly recognise associated price premiums gives procuring agencies and contractors the confidence to source green steel, while providing producers with the demand certainty needed to plan investments. This ensures that GPP mandates translate into sustained demand, investment confidence, and meaningful emissions reductions.

Stakeholders, including industry representatives, emphasise that a clear, credible demand mandate through GPP and targeted fiscal measures are the two most important levers for driving decarbonisation of India’s steel sector. Fiscal support from the Ministry of Finance, whether through dedicated incentive allocations to bridge the green steel premium or through measures such as GST rationalisation, will be critical to enable early adoption and smooth implementation of the mandate.

Experience from other international markets reinforces this view, showing that well-designed, time-bound fiscal interventions can support the early years of GPP implementation by easing procurement constraints, supporting supplier readiness, and accelerating market formation, while avoiding long-term subsidy dependence.

Expert voices from industry and policy institutions

• K S Venkatagiri, Executive Director, Confederation of Indian Industry and Chairman, Global Ecolabelling Network Board
  “Procurement readiness is becoming a defining factor of competitiveness as global markets move toward low-carbon materials. India’s green steel taxonomy provides a critical foundation for the sector by creating clarity and credibility for buyers. Green steel in India can scale significantly if the green steel taxonomy is matched with clear procurement frameworks and predictable fiscal support that help close the cost gap during the transition. Strategic public and private procurement, backed by targeted fiscal instruments, will be essential to translate climate ambition into commercially viable green steel markets.”
• Sakshi Balani, Director, Climate Catalyst
  “Over the last three years of working on steel decarbonisation, we have found that the main barrier to scaling green steel in India is not technology or ambition, but the lack of clear demand signals. Our research shows that when procurement rules recognise low-carbon steel and account for the green premium, green steel can be adopted at scale, with the material increase in overall project costs typically remaining below 1% for large infrastructure projects.”)
• Neelima Jain, Director, Industrial & Trade Policy, India Energy & Climate Center, University of California, Berkeley
  “India needs public procurement to create a predictable market for green-hydrogen steel. Set a phased mandate, backed by time-bound budget measures to underwrite early premiums and scale-up risk. Record-low green-ammonia bids and falling renewables plus storage costs imply green hydrogen price is near ~$3/kg. That brings this route to parity by 2030. The added fiscal cost is limited, while market certainty rises. It also keeps exports competitive as the EU CBAM tightens from 2026 and can avoid up to ~$1T in coking-coal imports.”
• Ali Hasanbeigi, Founder & CEO, Global Efficiency Intelligence
  “From what we see globally, Green Public Procurement works best when the demand signal is clear, phased, and supported in the early years. Countries that moved early paired procurement rules with simple ways to manage initial cost premiums and supplier readiness. India can follow this path, create predictable demand, stay competitive, and unlock investment in low-carbon steel without long-term subsidies.”
• Vaibhav Doshi, Associate Partner, Xynteo
  “As per our analysis, a phased Green Public Procurement approach allows governments to lead on low-carbon steel without waiting for perfect market conditions. Public buyers are major consumers of steel for infrastructure, and even early measures, such as disclosure requirements or minimum shares of lower-emissions steel, can create strong demand signals. We believe starting with feasible, scalable actions is critical to build market confidence, enable investment in cleaner steel production, and progressively tighten performance requirements over time.”

A coordinated ask ahead of the budget

The organisations involved, including the Confederation of Indian Industry, Climate Catalyst, Global Efficiency Intelligence, India Energy and Climate Center at UC Berkeley and Xynteo have been independently engaged in industry dialogue, research and policy engagement related to green steel and public procurement.

Collectively, they underline that the upcoming Union Budget presents a timely opportunity to align fiscal policy with a strong demand mandate. When supported by targeted and transitional budgetary measures, this alignment can help convert policy intent into predictable demand and strengthen the global competitiveness of Indian steel.

Disclaimer: This article is based on a press release and has been published with minimal modifications for clarity and formatting.