The Indian government is actively pursuing measures to assist steel producers in expanding their operational capacities further. 2024 is the anticipated implementation year for the second phase of the metallurgical sector’s government-led Production Linked Incentive (PLI) programme. Faggan Singh Kulaste, the Minister of State for Rural Development and Steel of India, made the announcement.
From April to November (eight months of the 2023/2024 fiscal year), the nation is projected to produce 94 million tonnes of steel, an increase of 14.5% over the corresponding period of the prior fiscal year. As a result, the government endeavours to provide steel companies with incentives to expand their capacity further.
Discussions are currently underway with industry representatives regarding the second phase of the initiative, which will build upon the lessons learned from the first phase. Authorities provide fiscal incentives to metallurgical companies participating in the PLI programme in exchange for developing supplementary capacities.
According to some estimates, $481 million from the fund created for the first phase of the PLI program (with a total fund size of $761 million per year) remains unused. During the initial stage, 67 metallurgical firms reached a participation agreement with the government, whereby they pledged to allocate $3.61 billion towards the development of novel metallurgical capabilities.
Furthermore, the government intends to guarantee the steel industry’s raw material supply, encourage the use of waste, and champion the implementation of advanced technologies and artificial intelligence in metallurgy to augment production volumes. Infrastructure projects are also anticipated to drive substantial development in steel production and demand in India by 2024.
The minister advised steel producers, such as the state-owned SAIL and RINL, to broaden their assortment of products to satisfy the expanding demands of numerous industries.
Simultaneously, the Indian Steel Producers Association (ISA) voiced apprehension regarding the swift escalation of imports and high costs of raw materials impacting the domestic market and urged the authorities to take decisive measures.
Notably, stable coking coal supplies will be negotiated between Australia and India. This measure constitutes an extension of the Indian government’s endeavours to aid its steel facilities in the face of diminishing raw material supplies and escalating costs.
