Govt approves Rs 6,322-cr PLI scheme to boost domestic specialty steel production
The government on Thursday approved a Rs 6,322-crore production linked incentive (PLI) scheme to boost production of specialty steel in India, attract fresh investments and create new job opportunities in the sector.
He said that incentives worth Rs 6,322 crore will be provided over a period of five years, and the move will help create over 5.25 lakh job opportunities.
''It will boost manufacturing and help in reducing imports,'' he told reporters.
As far as the incentive is concerned, it will be capped at Rs 200 crore. A company or a group will not be given incentive above Rs 200 crore in a year, Thakur explained.
On this PLI scheme, the Prime Minister tweeted, ''The steel sector will get an impetus with this crucial Cabinet decision.'' In a statement, the Ministry of Steel said the scheme will also attract an additional investment of about Rs 40,000 crore and lead to a capacity addition of 25 million tonnes (MT).
The duration of the scheme will be five years, from 2023-24 to 2027-28. It is expected that the speciality steel production will become 42 MT by the end of 2026-27. This will ensure that approximately Rs 2.5 lakh crore worth of specialty steel will be produced and consumed in the country, which would otherwise have been imported, the ministry said.
Similarly, the export of specialty steel will become around 5.5 MT as against the current 1.7 MT of specialty steel getting FOREX (foreign exchange) of Rs 33,000 crore. The PLI scheme will cover coated/plated steel products, high strength/wear resistant steel, specialty rails, alloy steel products, steel wires and electrical steel.
These steel products are used in white goods, automobile body parts and components, pipes for transportation of oil and gas, boilers, ballistic and armour sheets meant for defence application, high-speed railway lines, turbine components, electrical steel meant for power transformers and electric vehicles.
The steel ministry further said India presently operates at the lower end of the value chain in the steel sector. Value added steel grades are largely imported in India. ''This is because of the disabilities faced by the steel industry to the tune of USD 80-100 per tonne, on account of higher logistics and infra cost, higher power and capital cost and taxes and duties.'' The objective of the PLI scheme for specialty grade steel is to address this challenge by incentivising production of specialty steel within the country, it said. The scheme proposes to incentivise eligible manufacturers by paying between 4 per cent to 12 per cent incentive on incremental production.
PLI incentive will also help the Indian steel industry mature in terms of technology and move up the value chain, the ministry said. Any company registered in India, engaged in manufacturing of the identified 'specialty steel' grades, will be eligible to participate in the scheme, according to the ministry. The company has to ensure that the steel used for making 'specialty steel' is 'melted and poured' in the country, thereby ensuring end-to-end manufacturing keeping in view the Prime Minister's Atmanirbhar Bharat vision.
The statement further said the PLI scheme for specialty steel is expected to play an important role in strengthening the domestic steel value chain and will incentivise the steel sector to invest in technological capability building to contribute to the global steel value chain by producing value added steel. Reacting to the development, the Indian Steel Association (ISA) said the industry applauds the Union Cabinet's decision to approve the PLI scheme for specialty steel. The steel industry has demonstrated tremendous resilience in these challenging times. This decision will go a long way in enabling growth, not just for the steel sector, but overall infrastructure development.
Dilip Oommen, ISA President and the CEO of ArcelorMittal Nippon Steel India, said, ''It will help bring the country at par with the best in the industry globally. This milestone also reinforces the government's vision of building and growing an 'Aatmanirbhar Bharat' and we are confident that this move will truly provide further impetus to India's socioeconomic growth.'' Chandrajit Banerjee, Director General of industry body CII, said, ''The scheme for speciality steel announced today shows the government's commitment towards a Aatmanirbhar Bharat. This is another visionary initiative for a sector where India has a global competitive edge and today's announcement of incentivising the speciality steel segment will complete the journey for strengthening the entire value-chain.'' FICCI President Uday Shankar said, ''FICCI welcomes PLI for the specialty steel sector, which will support indigenous development, strengthen value chain and trade flows and attract investments in technological capabilities, creating a synergistic effect for the industry.'' PTI ABI RR MKJ
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)