22 JUL 2021: Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi, 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 an investment of approximately ₹40,000 crores and capacity addition of 25 MT for specialty steel. The scheme will give employment to about 5,25,000 people of which 68,000 will be direct employment.
Specialty steel has been chosen as the target segment because out of the production of 102 million tonnes of steel in India in 2020-21, only18 million tonnes of value-added steel/specialty 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 specialty steel, India will move up the steel value chain and come at par with advanced steel-making countries like Korea and Japan.
It is expected that the specialty steel production will become 42 million tonnes by the end of 2026-27. This will ensure that approximately 2.5 lakh crores worth of specialty steel will be produced and consumed in the country which would otherwise have been imported. Similarly, 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.
The benefit of this scheme will accrue to both big players i.e. integrated steel plants and to the smaller players (secondary steel players)
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 the automobile sector, specialized capital goods, etc.
The five categories of specialty steel that 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
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.
There are 3 slabs of PLI incentives, the lowest being 4 % and the highest being 12% which has been provided for electrical steel (CRGO). The PLI Scheme for specialty 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, thereby ensuring that the scheme promotes an end to end manufacturing within the country.Disclaimer: We donot claim that the images used as part of the news published are always owned by us. From time to time, we use images sourced as part of news or any related images or representations. Kindly take a look at our image usage policy on how we select the image that are used as part of the news.