Be it grievance redressal or fast-tracking clearances, to facilitating visas and having one-on-one discussions with PLI-approved companies, India’s Steel Ministry is pulling out all the stops as it looks to speed up “time-to-market” for speciality products cleared under the flagship manufacturing scheme.

Ministry officials are reportedly reaching out to approved companies “one-on-one,” while trying to bring back on-board those “who were selected, but had opted out of signing the MoUs”, sources said.

Some 13-odd companies have not signed the MoUs or withdrawn their applications (despite being selected) citing factors such as non-availability of environment clearances, non-selection in an adjoining product category, or even change in market conditions.

The PLI scheme that was signed earlier this year, saw 67 takers (selected companies) for speciality steel, and over 50 MoUs have been inked, taking the investment proposals to approximately Rs 30,000 crore. The scheme covers speciality steel-making in categories such as coated or plated steel, high strength and wear resistant steel, speciality rails, alloy steel and electrical steel.

An internal Ministry note – which was documented in September – and was reviewed by businessline said, MECON, the project management agency for PLI 1.0, received 54 signed MoUs from 26 companies, with an investment commitment of Rs 29,531 crore (spread over FY22–FY26) and downstream capacity addition of 24.7 million tonnes (mt). Incremental production was 8.6 mt and incentive outgo around Rs 2,300 crore. “MoUs have not been received in respect of 13 approved applications,” the note said.

Of the proposed investment, around Rs 10,730 crore worth of “actual investment” was made in line with the last review by the Ministry as of end Q2FY24. So far, there has been no actual disbursement. Disbursements are expected from next fiscal , sources said.

Ministry Steps In

A response in Parliament by the Minister of State for Steel, Faggan Singh Kulaste, said MECON, along with the Ministry, “has reached out to applicants for one-on-one discussions to understand the concerns and mitigate issues.”

The grievance redressal mechanism has also been constituted to oversee concerns or complaints that could arise during the implementation “at any stage” of the PLI scheme.

PLI 2.0 for steel in the works, proposes an outlay of ₹4,000 crore 

A project monitoring group, which was set up with the mandate to monitor large-scale infrastructure projects, has been extended to upload issues such as land acquisition, environment clearances and forest clearances being faced by PLI-approved companies during the scheme period.

“The standard operating procedure (SoP) to facilitate VISAs for experts has been issued by the Ministry of Home Affairs (MHA) and the Ministry of External Affairs (MEAs),” Kulaste said in a response.

Concerns Raised

So far, some of the concerns raised by participants pertain to land availability leading to delays, high cap-ex requirement, or non-viability of substantial demand for a specific product in the Indian market. In some cases, lack of knowledge in the specific steel-making segment has also been cited as a reason to back out.

Three companies have backed out of their investment commitments for manufacture of asymmetric rails, valve steel and tool and die steel.

Some applicants have reportedly re-approached the Ministry, pointing out that their investments in one particular category would be subject to clearances received in a corresponding or adjoining category (for which they have not been selected).

In one case, an applicant for a tin mill product said it would not go ahead with the proposed investment because of market volatility, while another applicant was reportedly reviewing the capacity, investment and incremental production commitment.

An applicant for asymmetric rails said it would not go ahead with the investment because of high cap-ex, while another applicant in the alloy steel category – for tool and die steel and valve steel – has withdrawn.

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