Production Linked Incentive (PLI) Scheme for specialty steel
- Union Cabinet has approved the Production Linked Incentive (PLI) Scheme for specialty steel.
- The duration of the scheme will be five years, from 2023-24 to 2027-28.
- With a budgetary outlay of ₹6322 crores, the scheme is expected to bring in investment of approximately ₹40,000 crores and capacity addition of 25 MT for speciality steel.
Why specialty steel chosen for scheme:
- Out of the production of 102 million tonnes steel in India in 2020-21, only18 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.
Specialty steel:
- Specialty steel 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 which can be used in various strategic applications like Defence, Space, Power, apart from automobile sector, specialized capital goods etc.
Five categories of specialty steel which have been chosen in the PLI Scheme:
- Coated/Plated Steel Products
- High Strength/Wear resistant Steel
- Specialty Rails
- Alloy Steel Products and Steel wires
- Electrical Steel
- Out of these product categories, it is expected that after completion of the Scheme India will start manufacturing products like API grade pipes, Head Hardened Rails, electrical steel (needed in transformers and electrical appliances) which are currently manufactured in very limited quantity or not manufactured at all.
Key features of scheme:
- There are 3 slabs of PLI incentives, the lowest being 4 % and highest being 12% which has been provided for electrical steel (CRGO).
- Scheme will ensure that the basic steel used is ‘melted and poured’within the country which means that raw material (finished steel) used for making specialty steel will be made in India only.
- The scheme will cover coated/plated steel products, high strength/wear resistant steel, specialty rails, alloy steel products, steel wires and electrical steel.
- Any company registered in India, engaged in manufacturing of the identified 'specialty steel' grades eligible to participate.
Benefits:
- give employment to about 5,25,000 people of which 68,000 will be direct employment.
- the export of specialty steel will become around 5.5 million tonnes as against the current 1.7 million tonnes of specialty steel getting FOREX of Rs 33,000 crore.
- Enhance export and minimising dependency on import of high end steel
- Bring in investment of apprx 40,000 cr
- Capacity addition 25 MT of steel
- promotes end to end manufacturing within the country.
- It will incentivise steel sector to invest in technological capacity building to contribute to global steel value chain