Response to media report on slow progress of investments in Production Linked Incentive Scheme for Specialty Steel in India

Under the Production Linked Incentive (PLI) Scheme for Specialty Steel, 57 MoUs have been executed for generating an investment of ₹29,500 crores, additional capacity of 25 MT for producing specialty steel grades and an additional employment to about 17,000 people by FY 2027-28. It may be mentioned that the PLI scheme, a vital initiative in India's industrial growth trajectory, was notified in July 2021 for fostering investments and enhancing capacities in the specialty steel segment.

Status of PLI Scheme for Specialty Steel

As of Dec '23, the selected companies have already invested about ₹12,900 crores against an investment commitment of ₹21,000 crores up to the current financial year. It is expected that another ₹3,000 crores will be invested by these companies during FY'24, i.e., about ₹16,000 crores of a total of ₹29,500 crores will be invested by FY 2023-24. The Ministry of Steel envisages an investment of ₹10,000 crore in FY 2024-25. It is also pertinent to mention that 5 units have begun production, and 9 more units are expected to begin production in this quarter.

Typically, investments in the steel sector have a long gestation period and depend on, inter alia, procurement of various equipment, many of which are sourced from abroad. Delays due to unavoidable circumstances in the projects include supply chain delays due to geopolitical issues, unforeseen events, natural disasters and changed market circumstances for certain PLI products also have an impact on the pace, phasing, and the quantum of investment.

Proactive engagement with the PLI beneficiaries

The Ministry of Steel, along with other relevant government departments, have been proactively engaging with the PLI beneficiaries to resolve issues faced by companies and facilitate them to meet their commitments under PLI. Measures have been taken to expedite clearances for projects, issue standard operating procedures for Indian visa for experts, and to address the concerns of the participating companies by continuous engagement with the stakeholders.

In view of the above and the significant growth of the economy, especially infrastructure, the demand for specialty steel would continue to show strong acceleration and PLI MoU holders would make up for the shortfall in investment. The Ministry of Steel is confident that the scheme will achieve its desired objectives notwithstanding the temporary setbacks.

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YKB/KS