Cabinet approves Rs 6,322 crore production-linked incentive scheme for specialty steel

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Yet another Production-linked Incentive (PLI) scheme has been announced by the government, with the specialty steel manufacturing sector now set to receive incentives worth Rs 6,322 crore.

To be provided over five years, the scheme is expected to bring in investment of approximately Rs 40,000 crore and capacity addition of 25 MT.

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 $80-$100 per ton, on account of higher logistics and infra cost, higher power and capital cost, and taxes and duties.

The scheme aims to address this disability by incentivising the production of specialty steel within the country. It proposes to incentivise eligible manufacturers by paying between 4 percent and 12 percent 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 PLI scheme would cover a range of steel products across a few specific categories. This includes coated or plated steel products, high strength or wear-resistant steel, specialty rails, alloy steel products, steel wires and electrical steel.

These steel products are used in a variety of applications which are both strategic and non-strategic in nature. They are used for automobile body parts and components, pipes for the transportation of oil and gas, boilers, ballistic and armour sheets meant for defence application, high-speed railway lines, and turbine components, the government said.