Union Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel

What is the News?

The Union Cabinet has approved the Production Linked Incentive(PLI) Scheme for specialty steel.

About PLI Scheme for Speciality Steel:

• The PLI Scheme aims to boost the production of high-grade specialty steel in the country.
• Coverage: The five categories of specialty steel that have been chosen in the PLI Scheme are: Coated/Plated Steel Products, High Strength/Wear-resistant Steel, Specialty Rails, Alloy Steel Products, and Steel wires, and Electrical Steel.
• Incentives: There are 3 slabs of PLI incentives under the scheme. The lowest being 4% and the highest is 12%, which has been provided for electrical steel (CRGO).
• Eligibility: Any company registered in India engaged in the manufacturing of the identified Specialty Steel are eligible to participate under the scheme.
• Duration: The duration of the scheme will be five years from 2023-24 to 2027-28.

Expected Benefits of the scheme:

• The scheme is expected to bring in an investment of approximately ₹40,000 crores and capacity addition of 25 MT for specialty steel.
• The scheme will give employment to about 5 lakh people, of which 68,000 will be direct employment.

What is Specialty Steel?

• Specialty steel is value-added steel wherein normal finished steel is worked upon by way of coating, plating, heat treatment, etc. to convert it into high-value-added steel.
• This steel can be used in various strategic applications like Defense, Space, Power, apart from the automobile sector, specialized capital goods among others.

Why was Speciality Steel chosen for the PLI Scheme?

• Speciality steel has been chosen as the target segment under the PLI Scheme. It is because out of the production of 102 million tonnes of steel in India in 2020-21, only 18 million tonnes of value-added steel/specialty steel was produced in the country.
• Apart from this, out of 6.7 million tonnes of imports in 2020-21, about 4 million tonnes import was of specialty steel alone resulting in Forex expenditure of Rs.30,000 crores.
• Hence, by becoming Atma Nirbhar in producing speciality steel, India will move up the steel value chain and come at par with advanced steel-making countries like Korea and Japan.