Categories: Agreements

Government signs MoU with 27 steel companies, kickstarting Rs 6,322-crore PLI scheme

Memorandum of Understanding (MoU)

The Ministry of Steel has signed 57 Memorandums of Understanding (MoUs) with 27 companies for specialty steel production under the Production Linked Incentive (PLI) Scheme. The government has allocated Rs. 6322 crores to boost the steel sector and generate an investment of about Rs. 30,000 crores, creating an additional capacity of approximately 25 million tonnes of specialty steel over the next five years. This move is expected to create numerous direct and indirect job opportunities while helping India achieve its goal of becoming the world’s third-largest economy by 2030-31.

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More about the news

In the Budget 2023-24, the Prime Minister and the finance minister announced an Rs. 10 lakh crore capital expenditure plan, which will create a significant demand for the steel industry. The international shift from West to East has enabled India to become an epicenter for steel sector growth and evolution. As a result, India is expected to become a manufacturing powerhouse, increasing the share of steel in the country’s GDP from 2% to 5%.

The steel companies involved in the scheme are encouraged to work with the government to increase the production of value-added steel in India, fulfilling the vision of the Prime Minister’s ‘Atmanirbharta.’ The government has assured the industry that necessary clearances at Union and State levels will be done faster, and bottlenecks will be removed promptly. The steel sector is set to contribute significantly to national infrastructure building in India’s pursuit of self-reliance.

The steel minister also emphasized the importance of moving from a hard-to-abate sector to a low-carbon emission sector. Carbon neutrality can be achieved through initiatives such as Green Steel and Green Hydrogen Mission. Additionally, boosting the circular economy in the steel sector is essential, with approximately 25 million tonnes of scrap used in the industry, offering scope for further growth.

Finally, the steel minister expressed optimism that India is on track to achieve record production of 125 million tonnes and 11% to 12% growth in consumption levels. The government has transitioned from being a regulator to a facilitator and collaborator, working with the steel industry to create a brighter future for the sector and the country as a whole.

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