Steelmakers hail Cabinet approval of PLI scheme for sector, say it would increase global competitiveness

India's top steelmakers Thursday said the industry investment in high-grade steel making would surge and increase its global competitiveness, amid the Union Cabinet's approval of the Production Linked Incentive (PLI) Scheme for speciality steel.

“It is a step in the right direction which will boost investment in the high-grade steel sector and drive global competitiveness of the Indian manufacturers,” said T. V. Narendran, managing director of Tata Steel.

Narendran added that the PLI scheme will provide an added advantage to the company’s future plans where “value-added products will be a major focus”.

Union Cabinet, chaired by the Prime Minister, Narendra Modi, approved the Production Linked Incentive (PLI) Scheme for speciality steel. The duration of the scheme will be five years, from 2023-24 to 2027-28, with a budgetary outlay of Rs 6,322 crores. However, a cap of Rs 200 crore per company will be imposed under the PLI scheme.

“The scheme is expected to bring in investment of approximately Rs 40,000 crores and capacity addition of 25 MT for speciality steel,” the ministry of steel said in a press release on Thursday.

“PLI will definitely give an edge to set up of domestic manufacturing facilities for speciality steel in the country and give a fillip to investment in R&D and Technology,” said Seshagiri Rao, joint managing director at JSW Steel.

The move will spur lending in the steel sector, said JSPL’s managing director, V.R.Sharma.

“This is a right announcement at the right time, this shows that the government is very positive about the steel sector. This gives a green signal and confidence to the bankers and financial institutions that steel is a core sector industry and lending will increase in the near future,” Sharma said.

Indian Steel Association, the industry body representing both the primary and secondary steelmakers in India said that Cabinet’s decision to approve the PLI scheme for Specialty Steel will play a pivotal role in enabling growth by promoting investments for the steel industry.

“We are confident that this milestone will also strengthen Governments’ vision of building a true ‘Atmanirbhar Bharat, which in turn will go a long way in accentuating India’s overall economic growth,” said Bhaskar Chatterjee, Secretary -General Indian Steel Association

Resonating a similar view, ArcelorMittal Nippon Steel India’s CEO, Dilip Oommen said the scheme is in the right direction towards the Atmanirbhar Bharat initiative.

“It will help bring the country at par with the best in the industry globally. This milestone also reinforces the Government’s vision of building and growing an 'Atmanirbhar Bharat' and we are confident that this move will truly provide further impetus to India's socio-economic growth,” Oommen said.

The scheme will cover coated/plated steel products, high strength/wear-resistant steel, speciality rails, alloy steel products, steel wires and electrical steel.

“We produce around 10 mt of speciality steel, but we also import around 3-4 mt of steel which is used for special purposes like warships, submarines, rails and more. This scheme will open a different opportunity for steel players,”

PLI scheme for the steel sector will enhanced exports and minimise dependence on imports for high-end steel in the country, bring in investment of approximately ?140,000 crores, generate potential employment of about 5.25 lakh, the cabinet said in a media statement.