PLI Scheme 1.1 launched for five products
Minister of Steel and Heavy Industries H. D. Kumaraswamy has called for active industry participation and investment to strengthen Brand India, reduce imports and position India as a global steel powerhouse.
Speaking at the second round of Production Linked Incentive (PLI) scheme for Specialty Steel, termed as PLI Scheme 1.1, on 6 Jan 2025 in New Delhi, he said, “The changes made in PLI scheme for specialty steel reflect the government’s commitment to strengthening domestic production, fostering innovation, and reducing imports.”
Kumaraswamy said the PLI scheme 1.1 for specialty Steel is for five product categories which is the same as the existing PLI Scheme to enable further participation as industry participants requested the ministry for relaxation https://www.indiasteelexpo.in/.
The scheme 1.1 will remain open from 6 Jan to 31 Jan 2025.
Steel Secretary Sandeep Poundrik pointed out that the scheme 1.1 is to be implemented during the production period of FY 2025-26 to FY 2029-30.
Certain changes have been incorporated with industry consultation to make the scheme more investor friendly, which includes reduction in threshold investment & capacity for the Cold-rolled grain-oriented steel (CRGO) product sub-categories, allowing carry forward of excess production to the immediately following year for the purpose of claiming incentive and reduction in threshold investment under capacity augmentation mode https://www.makeinindia.com/home/.
The PLI Scheme 1.1 covers five product categories in line with the existing PLI Scheme, namely Coated / Plated Steel Products, High Strength / Wear resistant Steel, Specialty Rails, Alloy Steel Products & Steel wires and Electrical Steel.
These products have a wide range of application, from white goods to transformers to Automobiles and other niche sectors.
The scheme will operate within the funds originally allocated for the scheme – Rs.6,322 crore https://sbi.com.in/ .
Changes to PLI rules have been made based on industry feedback. Not all companies would need to install new mills.
Recognising the importance of producing quality steel, energy efficiency and other process improvements, companies investing in augmentation of existing capacities will be allowed to participate in the scheme.
CRGO is a high-value steel used in production of power transformers used in HT power distribution. The technology to make CRGO is not available with any of the Indian steelmakers, the Steel Ministry said http://steel.gov.in.
Considering the strategic importance of becoming atmanirbhar in CRGO, the Steel Ministry has been having regular meetings with stakeholders aimed at increasing production of CRGO within the country https://www.investindia.gov.in/.
By reducing the investment and capacity creation thresholds to Rs.3,000 crore and 50,000 tonnes respectively, Ministry hopes that the industry would be enthused to participate in the category.
Companies can carry forward excess production to the immediate following year for the purpose of claiming incentive: In case production by a given company in a given sub-category exceeds its committed production for that year, the excess quantum of production may be carried forward for meeting the shortfall, if any, in achieving the committed production of the immediate next year.
This will ensure that incentives are distributed optimally, and no company is denied incentives, if they are unable to achieve an incremental production in the following year after a good year.
The first round of Production Linked Incentive (PLI) Scheme for Specialty Steel was notified on 29 July 2021 by the Ministry with a budgetary outlay of Rs.6,322 crore. The objective of the PLI scheme for specialty steel is to promote manufacturing of value-added steel grades within the country and help the Indian steel industry mature in terms of technology as well as move up the value chain.
This will also result in reduction in Imports of these grades and will be a step towards Atma Nirbhar Bharat.
In the first round, 44 projects by 26 companies are active with a committed investment of about Rs.27,106 crore and 24 million tonnes of downstream capacity creation.
As of November 2024, the actual investment achieved is around Rs.18,300 crore. Fiinews.com
