July 25, 2021
The Union Cabinet approved a US$ 850mn PLI scheme for speciality steel given for a period of five years.
This is estimated to create over 525,000 employment opportunities, including direct employment for 68,000 people.
Expected to bring in investment of approximately US$5.38bn and capacity addition of 25MT in specialty steel.
PLI will cover coated steel products, high strength steel, specialty rails, alloy steel goods, steel wires and electrical steel.
With the aim of providing a fillip to domestic manufacturing and exports in the steel sector, the Union Cabinet approved a US$ 850mn PLI scheme for specialty steel. In place for a period of five years, the scheme is expected to create over 525,000 employment opportunities, including direct employment for 68,000 people. Five categories of steel which will fall in the ambit of this scheme are coated/plated steel products, high strength/wear resistant steel, specialty rails, alloy steel goods, steel wires and electrical steel. he scheme is expected to bring in investment of approximately US$5.38bn while adding capacity of 25 million tonnes (MT) in specialty steel, up from 18MT produced today and going up to around 42 MT by 2026-27. The overall intent is for it to benefit both big and smaller players in the sector.,
Steel production is one of the major economic growth indicators in the country and plays a crucial role in the nation’s growth story. Specialty steel is a value-added steel, made by processing normal finished steel through coating, plating and heat treatment. Besides the automobile and specialised capital goods sector, applications for this type of value-added steel (specialty steel) can be found in other industries like defence, space, power, etc. According to Care Ratings, India was the second-largest producer of steel in the world in FY21, but of the 102 million tonnes of steel produced in 2020-21, only 18 million tonnes of value-added steel was produced. Most of the imports into India are in this segment. Of the 6.7 million tonnes of steel imports, nearly 4 million tonnes were of specialty steel resulting in forex outgo of approximately US$ 4bn. The above-mentioned PLI scheme will bolster the manufacturing capabilities of Indian steel mills and promote local end-to-end manufacturing, thereby encouraging MSMEs to source from them directly, and reducing the dependency on imports.
Till now, the Indian steel industry has not been competitive in the production of higher-grade alloy steel, and hence there is a need to stimulate the industry to move up the value chain and operate at the higher end. This will be made possible by increasing the production of specialty/ value-added steel.