The government is working on Production Linked Incentive (PLI) scheme 2.0 and to ensure adequate raw material supply for the steel sector in 2024, according to Ministor of State for Steel, Faggan Singh Kulaste.
“We are preparing for PLI 2.0 for the steel sector. It is under discussion at various levels,” Kulaste said while talking about the government’s priorities for the sector. This includes the promotion of using scrap, the minister said.
While robust economic growth will increase steel demand, industry players are concerned about rising imports and high raw material prices amid geopolitical uncertainties.
Production and consumption of steel have shown a strong recovery after the coronavirus pandemic impacted the sector in 2020-21.
During April-November 2023, the cumulative production of crude steel was 94.01 Million Tonnes (MT), up 14.5% y-o-y. The consumption of finished steel jumped 14% to 86.97 MT on an annual basis during the same period, data from the steel ministry shows.
India has set a target of having an installed steel manufacturing capacity of 300 MT by 2030. Currently, the country has a capacity of around 161 MT.
Efforts will be made to push for the use of artificial intelligence and newer technologies among industry players to boost steel output while also reducing carbon emissions, said Kulaste, who also holds the portfolio of MoS Rural Development.
The government had approved PLI scheme 1.0 to boost the production of speciality steel that would help create additional capacity of around 25 MT.
On production and demand for steel, the minister said they will grow significantly in 2024 on the back of infrastructure projects.
All steel players are increasing their capacities and to ensure ease of doing business, the government has been helping them with clearances related to their projects, Kulaste said.
"Our ministry remains in constant touch with the state governments and its officials to help them with any issue in their projects," he said, adding the government is also engaged with several countries to explore alternate options for sourcing of coking coal.
On the other hand, the Indian Steel Association (ISA) said surging imports and high raw material prices will remain a concern for the industry in the new year after experiencing "dumping of steel products" especially from China and Vietnam in the past.
India remains dependent on imports to meet 90% of its coking coal requirement. In 2023 so far, the imports have been between 70-80 MT.
ISA Secretary General Alok Sahay said the industry continued to face the issue of imports and expects strong measures from the government to check the surge in imports which is affecting the domestic market.
The grouping, which represents the interest of the domestic steel industry, expects steel production to be in the range of 123-127 MT in FY24.
Finished steel imports into India showed a growth of 18% to 5.87 MT in January-November 2023 from 4.96 MT in the same period of 2022. Exports from India showed a decline of 20% to 6 MT from 7.46 MT during the corresponding period last year, ISA said.
