ITA–BCG Study Finds Heavy Industry Growth Poses Challenge To India’s Clean Transition

India’s rapid industrial growth could lead to a 30 per cent rise in greenhouse gas (GHG) emissions by 2030 unless the country accelerates efforts towards clean industrialisation, according to the India Insights Briefing by the Industry Transition Accelerator (ITA) and Boston Consulting Group (BCG).

Industrial sectors contribute nearly a quarter of India’s gross domestic product (GDP) and employ over 11 million people, forming the backbone of economic growth. The report highlights that heavy industries steel, cement, aluminium, chemicals, aviation and shipping are vital to the country’s manufacturing ambitions and global competitiveness. India is already the world’s second-largest producer of steel, cement and aluminium, and the third-largest producer of fertilisers.

Driven by strong domestic consumption, infrastructure spending and export-linked reforms, India’s industrial output is expected to grow sharply. Demand for materials, chemicals and fuels is projected to increase by 30 to 70 per cent from 2024 to 2030. However, this expansion comes with rising emissions. As of 2020, India’s total GHG emissions stood at 2.96 gigatonnes of carbon dioxide equivalent, accounting for 7 to 8 per cent of global emissions.

The energy sector remains the largest contributor, responsible for about three-quarters of total emissions, followed by agriculture and industrial processes. Emissions from heavy industries currently make up 20 to 25 per cent of India’s total and are set to rise further as power and transport sectors decarbonise.

The report warns that if industrial growth continues to depend on fossil fuels, the sector could become the country’s biggest emitter by 2040. It stresses that decoupling economic growth from emissions will be essential for India’s goal of becoming a developed economy by 2047 under its Viksit Bharat vision.

The transition to cleaner industrial practices, it notes, will define the sustainability and pace of India’s development while determining its position as a global economic power.