The government on Thursday approved a Rs 6,322-crore production linked incentive (PLI) scheme to boost the production of specialty steel in India.
A decision in this regard was taken during the meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, Information and Broadcasting Minister Anurag Thakur informed.
He said that incentives worth Rs 6,322 crore will be provided over five years and it would create over 5.25 lakh jobs.
"It will boost manufacturing and help in reducing imports," he told reporters. In a statement, the Ministry of Steel said the scheme will also attract an additional investment of about Rs 40,000 crore and lead to a capacity addition of 25 million tonnes (MT).
The duration of the scheme will be five years, from 2023-24 to 2027-28. The PLI scheme will cover coated/plated steel products, high strength/wear-resistant steel, specialty rails, alloy steel products, steel wires, and electrical steel.
These steel products are used in white goods, automobile body parts and components, pipes for the transportation of oil and gas, boilers, ballistic and armor sheets meant for defense application, high-speed railway lines, turbine components, electrical steel meant for power transformers, and electric vehicles.
The Steel Ministry further said India presently operates at the lower end of the value chain in the steel sector. Value-added steel grades are largely imported in India.
"This is because of the disabilities faced by the steel industry to the tune of USD 80-100 per tonne, on account of higher logistics and infra cost, higher power and capital cost and, taxes and duties."
The objective of the PLI scheme for specialty grade steel is to address this challenge by incentivizing the production of specialty steel within the country, it said.
The scheme proposes to incentivise eligible manufacturers by paying between 4 per cent to 12 per cent incentive on incremental production.
PLI incentive will also help the Indian steel industry mature in terms of technology and move up the value chain, the ministry said.
Any company registered in India, engaged in manufacturing of the identified "specialty steel" grades, will be eligible to participate in the scheme, according to the Steel Ministry.
The company has to ensure that the steel used for making 'specialty steel' is 'melted and poured' in the country, thereby ensuring end-to-end manufacturing keeping in view the Prime Minister's Atmanirbhar Bharat'' vision.
The statement further said the PLI scheme for specialty steel is expected to play an important role in strengthening the domestic steel value chain and will incentivise the steel sector to invest in technological capability building to contribute to the global steel value chain by producing value-added steel.