The Steel Ministry is mulling a second edition of the production-linked incentive (PLI 2.0) for specialty steel making, while a strategy to include three product categories — which found no takers in the earlier version — is also in the works.
Co-ordination has begun with the Road Ministry , Ministry of Power, Ministry of Atomic Energy and Space, Ministry of Defence, and the Ministry of Commerce “for adding specialty steel (product categories) in PLI 2.0 scheme”, an internal note accessed by businessline shows.
In all likelihood, steel products used by these Ministries could find inclusion in the second phase of the project, those in the know said. Suggestions from the industry have also been sought for adding in new product categories in PLI 2.0.
“Strategy for three products in PLI (no application received),” is listed as part of the to do list in the internal note of the Ministry.
Imports of specialty steel – used primarily in downstream industry – increased from 58 per cent (of total imports of 6.7 million tonnes) in FY20 to 62 per cent (of total imports of 4.7 mt) in FY21 and then again to 64 per cent in FY22, as per ministry data (4.7 mt of imports).
Exports in the category dropped from 20 per cent (of total exports) in FY20 to 17 per cent in FY21.
PLI 1.0 MoUs
Speaking at an MoU signing event where companies which participated in PLI 1.0 scheme were present, the Union Minister for Steel and Civil Aviation, Jyotiraditya Scindia, confirmed that the “PLI 2.0 is in the works”. The exchange of MoUs on Friday happened with 27 companies out of 57 selected applicants.
The Centre introduced the PLI 1.0 where 67 applications from 30 companies at an investment commitment of ₹42,500 crore were selected. The scheme will see a downstream capacity addition of 26 mt and employment generation potential of 70,000. The PLI outlay is pegged at ₹6,322 crore.
Categories that were included in PLI 1.0 comprise coated or plated products, metallic and non metallic alloys (six applications), tin mill products, asymmetric rails, alloy steels – tool and dies steel and valve steel, tyre bead wire, among others.
“PLI 1.0 is not a full stop. It is the beginning. We are already working on PLI 2.0. Support, suggestions and feedback from the industry will be sought,” Scindia said.
According to Vedant Goel, MD, Neo Mega Steel LLP , ideally a new scheme should cover the entire value chain of the steel industry, including raw material sourcing, manufacturing, and distribution with benefits of the scheme being spread from upstream producers to downstream consumers.
“In addition, the PLI 2.0 scheme should prioritize the development of new and innovative steel products and could include those that have higher strength, are corrosion resistance and also environment-friendly,” he said.