Indian govt approves production-linked incentive scheme for specialty steel

The Indian government has approved the production-linked incentive (PLI) scheme for specialty steel for a duration of five years, from FY'24 to FY'28, according to an official release. With an outlay of INR 6,322 crore, the scheme is expected to bring in an investment of INR 40,000 crore and capacity addition of 25 million tonnes (mn t) for specialty steel.

The government expects that by the end of FY'26-27, India's specialty steel production would reach 42 mn t (worth INR 2.5 lakh crore). This will not only reduce the country's dependence on imports but will also help it to come at par with advanced steel making countries like South Korea and Japan.

Similarly, the export of specialty steel is expected to reach 5.5 mn t as against 1.7 mn t at present, getting forex of INR 33,000 crore.

Welcoming the PLI scheme, T.V. Narendran, CEO & MD, Tata Steel, said: "It is a step in the right direction which will boost investment in the high grade steel sector and drive global competitiveness of the Indian manufacturers… Tata Steel has been a pioneer in import substitution, especially in the auto sector....the PLI scheme will provide an added advantage to our future plans where value-added products will be a major focus."

Dr Bhaskar Chatterjee, Secretary-General, Indian Steel Association, said: "This scheme will play a pivotal role in enabling growth by promoting investments for the steel industry that historically has contributed immensely towards nation-building, and continues to do so..."

There are three slabs of PLI incentives, the lowest being 4% and highest being 12% which has been provided for electrical steel (CRGO).

The five categories of specialty steel which have been chosen in the PLI scheme are:

• Coated/plated steel products
  
  
• High strength/wear resistant steel
  
  
• Specialty rails
  
  
• Alloy steel products and steel wires
  
  
• Electrical steel
  
  

The benefit of this scheme will accrue to both big players i.e. integrated steel plants and to the smaller players (secondary steel players).