Under the scheme, incentives shall be payable to eligible companies for incremental production of speciality steel on a year-on-year basis, for five years. So, Government is encouraging them to add value to products. This will have a dual advantage. They will get better prices for value-added products in domestic as well as in international markets, and also get incentives under the scheme. Both Integrated steel producers, as well as secondary steel producers & MSME, will be benefited from the scheme. An outlay of Rs 6,322 crore has been planned to boost domestic steel manufacturing of ‘speciality steel’ and attract significant investments. Speciality steel’ grades that need to be incentivized were finalized in consultation with the producers and the user industries. ‘Specialty Steel’ is one of the 13 critical sectors identified for bolstering India’s manufacturing capabilities and enhancing exports, for which PLI Schemes have been approved.
The incentives are aimed at driving India’s growth by giving better value to the consumers and bringing in high import substitution. Further, the expected additional investments under the Scheme have the potential to not only meet the domestic demand but also create global champions in due course. PLI will help to achieve the Prime Minister’s vision of ‘Atmanirbhar Bharat’ in high-grade steel production besides achieving technological capabilities and creating a competitive and technically advanced eco-system. It will lead to domestic capacity addition in ‘speciality steel’ with an investment of about Rs 40,000 crore, reduction in import of about Rs 30,000 crore and enhanced exports of about Rs 33,000 crore. With the potential for creating additional manufacturing capacities of around 25 million tonnes, it is estimated that the Scheme has an employment generation potential of about 5,25,000, of which approximately 68,000 will be direct, and the rest will be indirect employment.
The Specialty Steel segment was chosen for incentivising because the Indian steel industry operates at a lower end of the value chain when it comes to steel trade. In FY 2020-21, India’s steel export was 10.7 million tonnes of which 1.8 million tonnes were of ‘speciality steel’ while imports were 4.7 million tonnes of which 2.9 million tonnes were of ‘speciality steel’. This imbalance of high imports and low exports as a percentage of total trade can be reversed by the PLI scheme.
National Steel Policy (NSP), 2017, has set a target of domestically meeting the entire demand of high-grade automotive steel, electrical steel, special steel, and alloys for strategic applications by 2030-31. The country can achieve this vision only if the government incentivizes the steel industry to enhance the production of such ‘speciality steel’ grades and move up the value chain. I am confident that this PLI Scheme will help us leapfrog to be in the league of countries producing high-quality value-added steel. Let us all work together to strengthen the “Make in India” brand denoting high quality at competitive prices.
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