The Union Cabinet, chaired by the Prime Minister Mr Narendra Modi, recently approved the Production Linked Incentive (PLI) Scheme for specialty steel.
The industry overall welcomed the scheme and said that this would enhance the production quality of speciality steel while also help in employment generation.
Commenting on the scheme Mr D K Mohanty, D(C) & CMD and D(P) Addl charge , RINL said “The PLI scheme is a welcome step toward making India a truly ‘Atmanirbhar Bharat’ as it will have multiple cascading positive effect . It will not only promote production of quality specialty steel for import substitution for the end users but also provide opportunity for the producers to export finished products for long term sustainability“.
As per the government, the duration of the scheme will be five years i.e. from 2023-24 to 2027-28.
What is Specialty steel?
It is value added steel wherein normal finished steel is worked upon by way of coating, plating, heat treatment, etc to convert it into high value added steel. This can be used in various strategic applications like Defence, Space, Power, apart from automobile sector, specialized capital goods etc.
With a budgetary outlay of Rs. 6322 crores, the scheme is expected to bring in investment of approximately Rs. 40,000 crores and capacity addition of 25 MT for speciality steel. The scheme will give employment to about 5,25,000 people of which 68,000 will be direct employment.
Speciality steel has been chosen as the target segment because out of the production of 102 million tonnes steel in India in 2020-21, only 18 million tonnes value added steel/speciality steel was produced in the country. Apart from this out of 6.7 million tonnes of imports in the same year, approx. 4 million tonnes import was of specialty steel alone resulting in FOREX outgo of Approx. Rs. 30,000 crores. By becoming Aatmanirbhar in producing speciality steel, India will move up the steel value chain and come at par with advanced steel making countries like Korea and Japan.“Incentives worth Rs.6,322 crores over 5 years”
The benefit of this scheme will accrue to both big players i.e. integrated steel plants and to the smaller players (secondary steel players) said a release from the ministry of steel.
It is expected that after completion of the Scheme India will start manufacturing products like API grade pipes, Head Hardened Rails, electricalsteel (needed in transformers and electrical appliances) which are currently manufacturedin very limited quantity or not manufactured at all.
5 categories in the PLI Scheme:
- Coated/Plated Steel Product
- High Strength/Wear resistant Steel
- Alloy Steel Products and Steel wires
- Specialty Rails
- Electrical Steel