Neha BaruahThe Union Government is set to roll out the next phase of the Production-Linked Incentive (PLI) scheme for the steel industry. This initiative focuses on bolstering domestic production of specialty steel while reducing reliance on imports. The Union Ministry of Steel announced that the scheme will officially launch on January 6, 2025, under the supervision of Union Minister H.D. Kumaraswamy, who will also open applications for interested firms.
Understanding the New PLI Scheme
The PLI scheme was first introduced during the COVID-19 pandemic to boost domestic manufacturing. Initially targeting three sectors, it expanded in November 2020 to include steel. Its main goal is to drive investments in the production of specialty steel, a critical component for various industries.
Highlights of the Previous PLI Scheme
The earlier version of the scheme achieved significant milestones:
- Investments Attracted: ₹27,106 crore
- Employment Generated: Approximately 14,760 direct jobs
- Production Target: 7.90 million tonnes of specialty steel
By November 2024, ₹18,300 crore had already been invested, leading to the creation of over 8,660 jobs.
Goals of the New PLI Scheme (PLI 1.1)
The updated scheme, branded as ‘PLI Scheme 1.1,’ aims to:
- Draw further investments into the sector.
- Strengthen domestic manufacturing capabilities.
- Expand the range of specialty steel products eligible for incentives.
- Build on the production targets set by the previous scheme.
Engagement with Industry Players
The Ministry of Steel has been actively engaging with industry stakeholders. Feedback from participants highlighted the need for a revamped initiative to enhance participation. Reopening the application process is expected to attract new players to the specialty steel market.
Scope of Specialty Steel Products
Specialty steel encompasses advanced materials used across sectors like defense, automotive, and electrical industries. The PLI scheme covers:
- Coated or plated steel products
- High-strength wear-resistant steel
- Specialty rails
- Alloy steel products
- Electrical steel
Looking Ahead: PLI Scheme Impact
The new phase of the PLI scheme will run from 2024-25 to 2030-31, with an estimated incentive of ₹775 crore for production achieved in 2023-24. The government is confident that this initiative will significantly boost the domestic specialty steel sector, paving the way for sustained growth and reduced dependency on imports.
Neha Baruah
Izaz Ahmed
Asik Syed
