The Indian government is considering launching a new round of the Production Linked Incentive (PLI) scheme, specifically targeting the private steel sector. The decision was taken following the lackluster response received to the first round of the initiative, as highlighted by Steel Secretary Sandeep Poundrik during his address at the CII Steel Summit 2024, which took place in New Delhi on September 27.
The PLI scheme was originally established to encourage growth and innovation in the specialty steel industry, which is crucial for various sectors, including defense, automotive, and electrical industries. However, participation levels have not met government expectations, prompting a reevaluation of strategies to attract more investments.
Currently, the government has allocated a considerable budget of 6,400 crore (approximately USD 770 million) under the existing PLI framework. However, only 2,600 crore (around USD 310 million) has been utilized so far, raising concerns about the effective use of these funds.
The introduction of a new PLI scheme reflects the government’s commitment to strengthening the specialty steel industry. The goal is to strengthen supply chains, boost domestic production, and create jobs by encouraging greater participation. Under this framework, the government aims to create a more resilient specialty steel industry that will not only meet domestic demands but also make India a competitive player in the global market. Addressing the weaknesses of the previous scheme and taking proactive steps enhances the potential of this initiative.
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