The Union Cabinet on Thursday approved Rs 6,322-crore production linked incentive scheme for specialty steel, a move aimed at boosting domestic manufacturing and exports from the sector, Information and Broadcasting Minister Anurag Thakur said.
He said that incentives worth Rs 6,322 crore will be provided over five years and it would create over 525,000 jobs.
"It will boost manufacturing and help in reducing imports," he told reporters in New Delhi
The PLI scheme would 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 a variety of applications which are both strategic and non-strategic and include white goods, automobile body parts, and components, pipes for transportation of oil and gas, boilers, ballistic and armor sheets meant for defense application, high-speed railway lines, turbine components, electrical steel meant for power transformers and electric vehicles," said the government in a statement.
The scheme will boost the production of high-grade specialty steel in the country. Further, it will lead to enhanced exports and minimizing dependence on imports for high-end steel. The scheme is expected to bring in investment of approximately Rs 40,000 crore and capacity addition of 25 million tonnes. The duration of the scheme will be 5 years, commencing from 2023-24 to 2027- 28.
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 $80-100 per ton, 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 disability by incentivizing the production of specialty steel within the country. The scheme proposes to incentivize eligible manufacturers by paying between 4% to 12% incentive on incremental production. PLI incentive will also help the Indian steel industry mature in terms of technology and move up the value chain," said the government.
Any company registered in India, engaged in manufacturing of the identified ‘specialty steel’ grades will be eligible to participate in the scheme. It will, however, have 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’ program.
PLI scheme for specialty steel is expected to play the important role in strengthening the domestic steel value chain and will incentivize the steel sector to invest in technological capability building to contribute to the global steel value chain by producing value-added to steel, added government. Considering the additional production and investment, the scheme has an employment generation potential of about 525,000 of which 68,000 will be direct and the rest will be indirect employment.