India's Core Industries
The Future of India's Heavy Industry
How India's core industries must grow to build infrastructure while cutting emissions, and a recap of the module.
India faces a double challenge: building enough steel, cement and energy for a growing economy, while cutting emissions to meet climate goals.
Growing demand
India’s per-person use of steel, cement and energy is far below rich countries. As India builds homes, roads, railways and factories, demand for core industry output will rise for decades.
Decarbonisation
India aims for net zero emissions by 2070. For heavy industry this means:
- Green hydrogen for steel, fertilisers and refining.
- Renewable power for electric processes.
- Carbon capture for cement and other processes.
- Efficiency and circular economy, such as more scrap recycling.
Carbon pricing
India’s Carbon Credit Trading Scheme sets emission intensity targets for heavy industries, starting with sectors like aluminium, cement, steel and refining, letting firms trade credits.
Global pressure
The EU’s carbon border adjustment puts costs on carbon-intensive imports, affecting Indian exporters of steel and aluminium.
Opportunities
- Green products for export markets.
- New industries: electrolysers, batteries and solar manufacturing.
Module recap
- The eight core industries supply the whole economy.
- India is the second-largest producer of steel and cement.
- Cheap imports, safeguard duties and green steel shape steel’s future.
- Cement is consolidating and regional.
- Refining, gas, metals and chemicals are key industries with global links.
- Heavy industries are cyclical and must decarbonise.
A steel company plans a new plant. To meet future carbon rules and export demand, it designs the plant to switch from gas to hydrogen later, paying more upfront to avoid becoming obsolete.
New technologies and planning can let heavy industry grow while cutting emissions intensity.
- Demand for core industry output will grow for decades.
- India targets net zero by 2070, requiring heavy industry decarbonisation.
- Carbon credit trading and the EU CBAM add pressure.
- Green products and clean technology industries offer opportunities.
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