Government Working On PLI 2.0 For Steel Sector In 2024

The government is working on Production Linked Incentive (PLI) scheme 2.0 as well as looking at ways to ensure adequate raw material supply for the steel sector in 2024, according to Union minister Faggan Singh Kulaste….

Production and consumption of steel have shown a strong recovery after the coronavirus pandemic that impacted the sector in 2020-21.

India has set a target of having an installed steel manufacturing capacity of 300 MT by 2030. At present, the country has a capacity of around 161 MT.“We are preparing for PLI 2.0 for the steel sector. It is under discussion at various levels,” Kulaste said while talking about the government’s priorities for the steel industry in 2024.

The government had approved the PLI scheme 1.0 to boost the production of speciality steel that would help create additional capacity of around 25 MT.On production and demand for steel, the minister said they will grow significantly in 2024 on the back of infrastructure projects.

All steel players are increasing their capacities and to ensure ease of doing business, the government has been helping them with clearances related to their projects, Kulaste said.

India remains dependent on imports to meet 90 per cent of its coking coal requirement. In 2023 so far, the imports have been between 70-80 MT.

ISA Secretary General Alok Sahay said the industry continued to face the issue of imports and expects strong measures from the government to check the surge in imports which is affecting the domestic market.

Sahay further said the government is actively considering the inclusion of refractories in the upcoming PLI scheme 2.0 for steel and will align with the ambitious goal of doubling the country’s steel production capacity to 300 MT by the year 2030.Meanwhile, Kulaste has also urged the steel makers, including state-owned SAIL and RINL, to increase their product mix keeping in mind the growing needs of various sectors where steel is required.

Tata Steel said it is seeing green shoots of demand recovery on the back of increased infrastructure spending in advanced economies to help the overall decarbonisation efforts. The auto sector, another key area for steel, is also showing good recovery.

“Muted consumption and investments affected steel demand across the world in 2023. Inflationary pressures coupled with geopolitical developments like wars in Ukraine and West Asia, contributed to the uncertainty. While supply chain bottlenecks eased, the manufacturing sector did not see significant improvement on the demand side,” the company said.

RanjanDhar, Chief Marketing Officer of ArcelorMittal Nippon Steel India (AM/NS India), said economic fluctuations and supply chain disruptions posed significant challenges. The steel sector successfully navigated these hurdles by adopting agile strategies, investing in research and development and fostering resilient supply chains, he added.