The government is expecting an investment worth ₹10,000 crore under the production-linked incentive (PLI) scheme for speciality steel for FY25, the ministry of steel has said.

"In view of the significant growth of the economy, especially infrastructure, the demand for speciality steel would continue to show strong acceleration and PLI MoU holders would make up for the shortfall in investment," says the ministry. Speciality steel is made after processing normal steel and has wide usage in automobile, defence, space, medical devices and power sector.

The PLI scheme for speciality steel, which was notified in July 2021, is applicable for five years from FY2022-23 to FY27-28. Under the scheme, 57 MoUs have been executed to generate an investment worth ₹29,500 crore, additional capacity of 25 MT (million tonnes) for producing specialty steel grades and an additional employment of about 17,000 people by FY28.

The ministry says that as of December 2023, selected companies have already made an investment worth ₹12,900 crore against an investment commitment of ₹21,000 crore in the current fiscal year. The government expects another ₹3,000 crore to be invested by these companies in the fourth quarter of FY24, thus making the total investment to be approximately ₹16,000 in the current fiscal year.

"It is also pertinent to mention that 5 units have begun production, and 9 more units are expected to begin production in this quarter," says the ministry.

It adds delays due to unavoidable circumstances in the projects include supply chain delays owing to geopolitical issues, unforeseen events, natural disasters and changed market circumstances for certain PLI products have impacted the pace, phasing and the quantum of investment.

"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," says the ministry. Its statement comes after several reports pointed to a slowdown in the investment of specialty scheme.

Notably, the interim budget has provided ₹270 crore for payment of incentives for FY25.

To boost the domestic manufacturing, the government introduced PLI scheme for 14 sectors including automobiles, electronic components, medical devices, pharmaceutical drugs, advanced chemistry cell (ACC) battery, and high solar PV modules, among others with an outlay of ₹1.97 lakh crore.

"The purpose of the PLI Schemes is to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive," the government said earlier.

Production Linked Incentive (PLI) Scheme

Govt expects ₹10,000 cr investment in PLI scheme for speciality steel in FY25