PLI for specialty steel could see another deadline extension

India’s PLI Scheme for specialty steel could see another deadline extension — by at least two to three weeks — and some more tweaks, for want of requisite number of takers, a steel ministry official told BusinessLine.

The scheme has so far received 10 applications and 58 registrations, officials said. The last date of submission had been extended to May 31.

‘Specialty steel’ is a downstream, value-added product wherein normal finished steel is worked upon by way of coating, plating, heat treatment etc. It has various strategic applications including in sectors such as defence, space, power, automobiles, and specialised capital goods.

The scheme has reportedly seen two extensions in deadline — once to April and then to May — from the original March 29 deadline. The extensions happened post certain concerns being raised by the country’s steel makers.

“We are factoring in some more suggestions from the industry and there could be a likely extension of the last date by further two to three weeks. It’s not final yet, but there could be certain modifications that will be incorporated,” a ministry official said.

New modifications

Some new modifications that the government is currently working on include having a uniform incentive on the production of speciality steel. More grades — especially those used in the defence sector — could also be added to the scheme. The five categories of specialty steel previously chosen in the scheme were coated/plated steel products, high strength/wear-resistant steel, specialty rails, alloy steel products and steel wires, and electrical steel.

It is reported that some concerns had been raised around the cap of ₹200 crore on an eligible company across product categories, the threshold on minimum incremental production, and minimum investment. For smaller players, even ₹200 crore is a high eligibility bar.

Therefore, for facilitating secondary steel-makers, the ministry is planning to do away with the minimum investment cap proposed earlier. Requirements on setting up of minimum capacity may also be done away with.

“Doing away with some annual turnover requirements, and the minimum capacity that one needs to set up, may be included to facilitate secondary steel-makers,” the official added.

With a budgetary outlay of ₹6,322 crore, the PLI scheme for speciality steel is expected to bring in investment of approximately ₹40,000 crore and generate both direct and indirect employment. The duration of the scheme is five years, from FY24 to FY28.

The benefit of this scheme will accrue to both big players (integrated steel plants) as well as to smaller players (secondary steel players), the official said.

India’s steel sector is dominated by six big players — four in private sector and two in public sector.