The government will reopen the window for accepting applications under the Production Linked Incentive (PLI) scheme for speciality steel, in view of the high investor interest in the sector.
The PLI 1.1 Scheme for the steel sector will be launched on Monday by minister of steel H D Kumaraswamy, sources said.
The reopening of the scheme for fresh applications will benefit companies who aren’t existing players in the fast-growing sector but plan to make a foray into it. It will also ensure that the targets set for the scheme in terms of incremental production and disbursement are met. There is also a demand from the industry to expand the list of speciality products under the scheme.
Major steel companies like SAIL, Tata Steel, JSW, JSPL and ArcelorMittal Nippon Steel (AWNS) were among the applicants in the first phase of specialty steel PLI.
Specialty steel is superior to conventional alloy, with its higher strength, better physical and chemical properties, better biocompatibility, and improved process characteristics.
The PLI scheme for specialty steel was notified in October 2021. In all, 67 applications have been approved under the scheme, 66 in 2022-23 and just one in 2024-25.
It has an outlay of Rs 6,322 crore and is expected to bring in investment of approximately Rs 40,000 crores and capacity addition of 25 MT for speciality steel. The scheme is expected to give employment to about 5,25,000 people of which 68,000 will be direct employment.
PLI has attracted a commitment in investment of Rs 27,106 crore, direct employment of 14,760 and estimated production of 7.90 million tonnes of ‘Specialty Steel’ identified in the scheme. As of November 2024, companies have already invested Rs 18,300 crore and generated over 8,660 in employment.
The products covered by the scheme are coated or plated steel products, high strength wear resistant steel, speciality rails, alloy steel products and steel wires, and electrical steel.
The five year period of the scheme is from 2024-25 to 2030-31. In 2024-25 an incentive of around Rs 775 crore is expected to be released for production done in 2023-24.
Earlier the government had re-opened the window for the second time for accepting applications in the PLI scheme for LEDs and white goods. PLI scheme that was first announced in 2020 and then extended to include14 sectors has so far received 764 applications. Of the total outlay of Rs 1.97 lakh crore, the incentive amount of Rs 9,721 crore have been claimed under PLI Scheme for 9 sectors till FY 2023-24. The sectors that have applied for and received incentives include large scale electronics manufacturing (LSEM), IT hardware, bulk drugs, medical devices, pharmaceuticals, telecom and networking products, food processing, white goods and drones and drone components.
Actual investment of Rs 1.46 lakh crore have been realized till August 2024 under the scheme. It has resulted in incremental production of over Rs 12.50 lakh crore and employment generation of over 9.5 lakhs. PLI Schemes have witnessed exports surpassing Rs. 4 lakh crore with significant contributions from sectors such as electronics, pharmaceuticals, and food processing.