Abstract The anticipated economic and population growth in India will increase demand for material resources, energy and consequently carbon emissions. The global ambition to limit global warming to 1.5 °C by the end of the century calls for rapid and unprecedented action. As the most carbon-intensive sectors, India's steel and cement industry will require a more transformative shift, both on the demand and supply side. Strategies from both supply and demand-side are analysed for steel and cement sector to understand consequences for energy and emissions using two modelling approaches i) energy system and ii) material flow models. A portfolio of technically feasible options to reduce the material, energy and CO2 intensity is explored under four alternate scenarios spanning till 2050 differentiated by their mitigation ambition and development paradigm. Results show that current policies in India will provide adequate incentives for achieving the climate targets India has submitted within its Nationally Determined Contribution (NDC) however, dematerialisation, reuse and recycling will be necessary for achieving the global ambition of 1.5 °C. The study concludes that a stringent carbon policy in combination with strong sustainability principles can reduce CO2 emissions by 68% in the steel and cement sector in 1.5 °C Scenario compared to NDC Scenario.