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India is trying to save some export bucks in the new year where specialty steel is concerned.
In 2022, India plans to focus on increasing per capita steel consumption enhancing steel raw material security.
In line with its announcement in mid-2021, the Government of India (GoI) recently invited applications from investors looking to invest under the production-linked incentive (PLI) scheme for specialty steel. The deadline for all submissions is March 29, 2022, as per the Ministry of Steel announcement. The incentive payout could well be over U.S. $840 million over five years for those companies participating in the scheme.
Specifically, specialty steel is a variety of the alloy that is enhanced by coating, plating, heat treatment, etc., to transform it into high-value steel for numerous strategic sectors, such as defense, space, power and automobiles, among others.
With the PLI scheme, India aims to become less dependent on special steel imports into India.
The PLI scheme aims to promote the manufacture of specialty steel grades in India. Furthermore, it seems to help the steel industry rise to the top of the value chain through technology development.
The broad five target categories for the scheme are: coated/plated products, high-strength/wear-resistant steel, specialty rails, alloy steel products and steel wires, and electrical steel.
Already, both, state-owned and private steel companies have come forward and expressed their interest in the proposed scheme.
State-owned SAIL, for example, has said it would consider availing the benefits when it draws up its next round of capex plans. Private player JSPL and Tata Steel also indicated they were contemplating registering for the PLI scheme.
The scheme proposes to encourage eligible manufacturers by paying between 4-12% incentive on incremental production.
India’s steel market flourished & grew in 2021, despite the COVID-19 pandemic. The government has already reiterated that even as the sector grows, the focus will also be on finding new markets. That is significant also because of China’s slowing down of steel production over environmental concerns.
As per the National Steel Policy 2017, the government has set a target to ramp up the country’s crude steel production output to 300 million tons (MT) by 2030. The policy also seeks to increase domestic per capita steel consumption to 160 kg by 2030.
At present, India’s per capita steel consumption is about 72.3 kg, while the capacity is at 143.9 MTPA.
In order to participate in the scheme, any Indian company manufacturing the identified “specialty steel” grades will have to register in India. To guarantee end-to-end manufacturing, companies will have to ensure that the steel used to make “specialty steel” is melted and poured in the country.
By AG Metal Miner
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