Govt reviews ship‑recycled steel to lift domestic manufacturing

The Steel & Heavy Industries Ministry and the Ports, Shipping & Waterways Ministry convened a high‑level review of ship‑recycled steel on 16 September 2026. The meeting, co‑chaired by Minister H.D. Kumaraswamy and Minister Sarbananda Sonowal, brought together officials from the Department of Science and Technology (DST), the Bureau of Indian Standards (BIS), the Gujarat Maritime Board (GMB) and the Ship Recycling Industries Association (SRIA) to assess regulatory gaps and sectoral opportunities.

Policy focus and expected outcomes

According to the official statement, the government aims to boost domestic steel output, reduce reliance on imported raw materials and reinforce India’s leadership in ship recycling. The discussion highlighted the role of recycled steel in supporting “Make in India” and “Atmanirbhar Bharat” initiatives, while promoting circular‑economy practices and decarbonisation targets.

Technical potential of ship‑derived steel

Research by Climate Catalyst notes that a typical ship is about 90 % steel by weight, and India’s ship‑recycling yards recover up to 98 % of a vessel’s material for reuse or melting. Each tonne of recycled steel saves roughly 1.4 tonnes of iron ore, 0.8 tonnes of coal and 0.3 tonnes of limestone, and avoids 1.67 tonnes of CO₂ emissions. Rerolled steel—directly repurposed without melting—can also save around 600 units of electricity per tonne, underscoring its energy‑efficiency advantage.

Supply constraints and market share

Only about 25 % of steel recovered from ship dismantling qualifies as “melting scrap” suitable for electric‑arc furnaces (EAFs) or induction furnaces (IFs). The remaining 75 % is transformed into value‑added products such as plates, beams and bars for niche applications, commanding a price premium over standard scrap. While ship recycling contributes a modest share of India’s overall scrap supply, targeted policy incentives—such as automated shredders and pre‑cleaning systems—could improve scrap quality and increase its share in crude‑steel production.

Economic and employment impact

The ship‑recycling sector supports large‑scale employment across transport, re‑rolling mills, equipment supply and waste‑management services. By expanding the use of secondary steel, the government expects to generate additional value for local manufacturers and sustain the supply chain for downstream industries.

Global context and India’s positioning

Globally, about 85 % of ship recycling occurs in South Asia, with India accounting for roughly 30 % of the world’s activity. The Alang‑Sosiya cluster in Gujarat handles about 97 % of India’s ship‑recycling volume, making it the world’s largest hub. Strengthening this sector aligns with India’s ambition to remain a global leader in sustainable ship dismantling.

“The initiative seeks to turn ship‑derived steel into a strategic asset for domestic manufacturing while cutting emissions,” a senior official said during the meeting.

Stakeholders agreed to review existing regulations, explore new applications for secondary steel and consider incentives that could accelerate the adoption of recycled material across construction, automotive and infrastructure projects.

Future steps include detailed feasibility studies, pilot projects in re‑rolling mills and the formulation of standards that certify the quality of ship‑recycled steel for critical uses.