The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the Production Linked Incentive (PLI) Scheme for specialty steel today, recognizing the importance of the steel sector in the Indian economy.
The program will increase the country's output of high-grade specialty steel. It will also result in increased exports and less reliance on imports for high-end steel. The scheme is expected to generate an investment of approximately 40,000 crores and an increase in capacity of 25 MT. The scheme will run for five years, beginning in 2023-24 and ending in 2027-28.
Highlights of PLI For Specialty Steel
- Coated/plated steel products, high strength/wear-resistant steel, specialized rails, alloy steel products, steel wires, and electrical steel would be covered by the PLI scheme, which has a budget of Rs 6322 crores.
- White goods, automobile body parts, and components, pipes for oil and gas transportation, boilers, ballistic and armor sheets for defense applications, high-speed railway lines, turbine components, and electrical steel for power transformers and electric vehicles are just a few of the applications for these steel products.
- In the steel industry, India is now at the bottom of the value chain. In India, value-added steel grades are mostly imported. This is due to the steel industry's difficulties, which amount to USD 80-100 per tonne, as a result of higher logistics and infrastructure costs, higher power and capital costs, and taxes and duties.
- The PLI plan for specialty grade steel aims to address this problem by incentivizing specialty steel manufacturing within the country. The Scheme intends to pay qualified manufacturers a 4% to 12% incentive on incremental production. The PLI incentive will also assist India's steel industry in maturing technologically and moving up the value chain.
- Any Indian enterprise engaged in the production of the selected "specialty steel" grades will be eligible to participate in the initiative. It must, however, ensure that the steel used to make 'specialty steel' is 'melted and poured' in the country, assuring end-to-end production in line with Prime Minister Narendra Modi's 'Atmanirbhar Bharat' initiative.
The PLI scheme for specialty steel is intended to play a significant role in strengthening the local steel value chain, incentivizing the steel industry to invest in technological capabilities development in order to contribute to the global steel value chain by manufacturing value-added steel. With the added production and investment, the project has the potential to generate about 5.25 lakh jobs, 68,000 of which will be direct jobs and the rest would be indirect jobs.