Government has approved the production linked incentive scheme (PLI) for speciality steel, which will run for five years from 2023-24 to 2027-28 with a budgetary outlay of Rs 6,322 crore.
The decision was taken by the Union Cabinet which met on Thursday.
Official sources said that the scheme is expected to bring in investment of approximately Rs 40,000 crore and lead to capacity addition of 25 million tonnes for speciality steel.
Speciality steel has been chosen as the target segment because out of the production of 102 million tonnes steel in India in 2020-21, only 18 million tonnes value added steel or speciality steel was produced in the country.
Apart from this out of 6.7 million tonnes of imports in 2020-21, approximately 4 million tonnes of import was of specialty steel alone resulting in foreign exchange outgo of around Rs 30,000 crores.
It is expected that speciality steel production will reach around 42 million tonnes by the end of 2026-27. This will ensure that around 2.5 lakh crores worth of speciality steel will be produced and consumed in the country which would otherwise have been imported, sources said.
Similarly, the export of specialty steel will become around 5.5 million tonnes as against the current 1.7 million tonnes of specialty steel getting foreign exchange of Rs 33,000 crore, they further added.