“India Is Setting Its Own Benchmarks for Low-Carbon Industry”
As India scales up industrial growth, it is also redefining what responsible production means. Vaibhav Kakulte, President – Business Development and Corporate Relations, Greta Energy Ltd, explores how emerging benchmarks are shaping India’s path towards a competitive, low-carbon industrial future.
The most interesting change taking place in Indian industry may not be visible in any industrial facility. It is happening in the way the country is beginning to define what responsible industrial growth should look like.
For the past decade, India’s priorities have been clear under the leadership of Hon’ble Prime Minister Narendra Modi. The country has invested in manufacturing, infrastructure and energy security at a scale that reflects its ambitions for the future. The ₹12.2 lakh crore capital expenditure allocation for 2026-27 is another indication of that continuing direction.
The building capacity is only one part of the challenge. The other is ensuring that this capacity remains relevant in a world increasingly concerned with emissions, resource efficiency and the environmental cost of production.
Steel brings this issue into focus. India remains the world’s second – largest producer of crude steel with its industry growing rapidly over the past decade. The country is now working towards 500 million tonnes of steel capacity by 2047. A large part of this capacity is yet to come up. That gives India a chance to consider emissions while new plants are being planned, instead of trying to fix the problem later.
India’s Green Steel Taxonomy adds an important layer to this effort. Introduced by the Ministry of Steel in December 2024, it gives the industry a common way to measure the emissions linked to steel production. Steel with emissions below 1.6 tonnes of CO₂ equivalent per tonne of finished steel receives the highest five-star rating. By March 2026, 89 units had received certification.
The significance of this development extends beyond steel. It gives Indian industry a common language for discussing lower-carbon production. It also creates a domestic reference point for lenders, buyers and international trade partners evaluating environmental performance.
India’s circumstances are different from those of countries that industrialised decades ago. Its energy needs, resource base and development priorities cannot simply be fitted into frameworks designed elsewhere. Developing benchmarks that reflect these realities while remaining credible globally is therefore an important step.
The broader policy direction supports this effort. The Carbon Credit Trading Scheme is being extended to iron and steel, while the Union Budget has allocated ₹20,000 crore over five years towards carbon capture, utilisation and storage. A separate ₹37,500 crore scheme approved in May 2026 is supporting coal and lignite gasification.
The energy transition is moving alongside industrial expansion. Non-fossil sources now account for half of India’s installed power capacity, achieved five years ahead of the country’s 2030 target. This progress will matter increasingly in international trade. The European Union’s Carbon Border Adjustment Mechanism has entered its definitive phase, making emissions performance an important consideration for exporters.
Indian industry will need to demonstrate more than how much it produces. It will increasingly need to demonstrate how it produces it. That is where the real value of these benchmarks will be tested. They must influence investment decisions, plant design, financing and procurement.
India’s industrial future is still being built. The opportunity is to ensure that its next generation of manufacturing capacity is competitive not only in scale and cost, but also in the environmental standards it sets for itself.
