Rs 6,322-crore steel PLI scheme likely to get Cabinet approval soon

The Union Cabinet is likely to approve soon a Rs 6,322-crore Production-Linked Incentive (PLI) scheme to boost domestic manufacturing of speciality steel and attract more investments, government officials said.

 

The scheme will offer an incentive of 4-15 per cent to eligible companies on incremental production, conditional on minimum investment for speciality steel manufactured in India and covered under the PLI scheme. The scheme will be implemented over 2023-24 to 2029-30, an official said, adding there would be a cap on maximum incentive paid to each beneficiary. The base year will be 2019-20.

 

The scheme will cover five broad categories of steel products -- coated steel products, high strength steel, speciality rai­ls, steel wires and electrical steel. “As far as eligibility is concerned, applications of end-to-end manufacturers and joint ventures will be considered. There has to be 20 per cent value addition by third parties and priority will be given to front-loaded investments.”

 

A PLI scheme in specialty steel is expected to boost manufacturing capabilities for value-added steel, increasing exports. Implem­entation of such a scheme is crucial as currently, specialty steel is used by most developed nations, with India being primarily import-dependent. Even as India is the world’s second largest steel producer as well as a net exporter of finished steel, the average value of outbound shipment is significantly lower than imports, which are mainly high grade and speciality steel products.

 

While the final norms are being prepared by the steel ministry, the official said a Cabinet note has already been sent to the PMO Office.