Major steelmakers such as Steel Authority of India Limited (SAIL), ArcelorMittal Nippon Steel India, Tata Steel and JSW Steel as well as several other smaller companies are on the list of approved applicants. The company will set up an additional capacity of 26 million tons as part of the five-year scheme and this could generate up to 70,000 potential jobs, according to a government statement.
The government had invited applications for the PLI scheme for special steel last year but had to extend the deadline several times. It received 79 applications from around 35 large and small steelmakers with a final deadline of September 15 this year.
This scheme is designed to incentivize the localization of steel used for specific applications which are currently mostly imported from countries such as Japan and South Korea. It covers more than 20 categories such as galvanized steel, coated products, steel for tire bead wire, and others. Although India is largely self-sufficient in terms of its steel needs – with less than 10% of domestic demand met through imports – there are various categories of special purpose steel in which the country is still completely dependent on imports.
The PLI scheme will incentivize companies to make the high capital investments required to produce this steel category, helping not only serve the domestic market but also opening up new export opportunities.
“The Union Cabinet endorsed the (Related) Production Incentive Scheme (PLI) to encourage domestic production of “Special Steel” to advance technology and create jobs in the steel industry,” the steel ministry tweeted late Friday.
The scheme comes at a time when the global steel market is in turmoil as input costs remain high even as consumption falls. India continues to be a rare bright spot in the weak global steel market and in recent weeks, many countries have shifted their excess production to India.