The Steel Ministry is finalising guidelines for the second phase of the production linked incentive (PLI 2.0) targeting speciality steel making across premium and high value categories. The total outlay is expected to be around ₹4,000 crore, nearly double of PLI 1.0, those aware of the discussions told businessline.

Segments to be covered include coated and plated steel, high strength and wear resistant offerings, speciality rails, alloys including wires and tubes, electrical steel, among others. The scope of PLI 2.0 is also being expanded to include strategic sectors like defence and infrastructure. 

According to officials, consultations have been carried out “with other stake-holder ministries” and also industry participants. Based on some suggestions, modifications towards the PLI 2.0 guidelines are being looked into. 

Those in the know say, other stakeholder ministries include Roads, Department of Atomic Research, Commerce, Defence, and others. 

The PLI 2.0 scheme will look to promote high-end steel or speciality steel manufacturing in India, thereby looking to reduce the country’s import dependence in these segments. 

Draft guidelines

An initial draft of the PLI 2.0 scheme, reviewed by businessline, show that coated plated steel usage is across tin mill products where investments are expected to be a minimum of ₹500 crore towards capacity addition. Eligible products are used mostly in automobiles. 

Speciality rails find use in head hardened rails and the segment is likely to draw investments of ₹200 crore; alloy steel (in wires and tubes) could see investments to the tune of ₹100 crore in segments like tool and die, valve steel and automotive power tool, ₹80 crore investments in each of the tyre beads and metallic coated wires. Products like zinc/ aluminium/copper coated wires, carbon steel and high strength rebars, CRGOs would be eligible for PLI. 

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Higher investments of ₹1,000 crore likely in seamless pipe and tube mills; nearly ₹3,000 crore in electrical steels; and around ₹1,400 crore could come in capacity addition across strategic sectors like super alloys (like nickel and cobalt-iron based bars, wires, plates and steel), titanium alloys and forged wheel for Railways.

“The Ministry’s outlay (in terms of benefits provided) expectation for PLI 2.0 is around ₹4,000 crore, subject to fund availability,” a source said.

PLI 1.0 review

The first phase of the PLI scheme saw the Centre sign 57 MoUs with 27 companies thereby bringing in investments to the tune of ₹29,000 crore. The PLI outgo is pegged at ₹2,300 crore. 

Capacity addition in the speciality steel segments is around 25 million tonnes per annum. 

“A detailed progress report on PLI 1.0 is expected by the end of this month. And from FY25, the PLI benefits will accrue to these players,” the source said.

Some of the categories that PLI 1.0 is covering include coated steel in non-alloyed category, wires, water and weather resistant steel, asymmetric rails with forgings, metallic coated wires, among others. 

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