Union Minister of Steel and Heavy Industries H.D. Kumaraswamy will officially launch the Production-Linked Incentive (PLI) Scheme 1.1 for the steel industry on Monday at Vigyan Bhavan in New Delhi. The scheme aims to drive investments, increase employment opportunities, and bolster domestic production of specialty steel to strengthen India’s manufacturing capabilities.
PLI Scheme: Key Objectives and Progress So Far
The PLI scheme for steel, introduced in November 2020, has attracted investment commitments worth ₹27,106 crore. It has directly employed 14,760 individuals and supported the production of 7.9 million tonnes of specialty steel.
This steel is primarily used in aerospace, defense, power, and automotive industries. As of November 2024, realized investments stand at ₹18,300 crore, creating employment for over 8,660 individuals.
The Ministry of Steel emphasized that ongoing consultations with stakeholders highlighted the need to relaunch the scheme to attract wider participation from industry players.
A Step Towards Green Steel Transition
The government is also advancing its ‘Green Steel Mission’ with an estimated budget of ₹15,000 crore, aimed at decarbonizing steel production and aligning with India’s Net Zero goals. Key components of this mission include:
- PLI Scheme for Green Steel to incentivize sustainable practices.
- Use of renewable energy to reduce carbon emissions.
- Mandates for government agencies to procure green steel, creating a demand-driven market.
The National Green Hydrogen Mission, spearheaded by the Ministry of New and Renewable Energy (MNRE), integrates the steel sector into its roadmap for green hydrogen adoption. This mission has allocated ₹455 crore for pilot projects in the iron and steel sector, running until FY 2029-30.
Decarbonization Efforts in Steel Production
In September 2024, the Ministry awarded two pilot projects for producing Direct Reduced Iron (DRI) using 100% hydrogen in vertical shafts and one pilot project to reduce coal consumption in blast furnaces by introducing hydrogen.
Additionally, pilot projects for hydrogen injection in DRI units to substitute natural gas are under exploration. These steps are crucial for reducing carbon footprints in steel manufacturing.
Greening the Steel Sector
The Taxonomy for Green Steel, released on December 12, 2024, provides a standardized framework for defining, categorizing, and rating low-emission steel products. It aims to create clarity for investors, manufacturers, and policymakers on the benchmarks for sustainable steel production.
The Steel Scrap Recycling Policy also complements these efforts by ensuring better resource efficiency and increasing the availability of high-quality domestic scrap for production.
India’s Global Steel Strategy
The government is simultaneously working on a Global Steel Outlook Strategy to position India as a leader in the global steel industry. The strategy focuses on four core areas:
- Raw Material Security
- Investment Opportunities
- Technological Advancements
- Steel Exports
A Working Group is actively consulting stakeholders to finalize a Strategy Paper outlining key areas of collaboration and actionable goals for priority countries.
A Vision for the Future
The upcoming PLI Scheme 1.1 and green initiatives mark a significant step towards strengthening India’s self-reliance in manufacturing. These efforts also aim to improve sustainability and global competitiveness in the steel industry.
Union Minister H.D. Kumaraswamy is expected to present a detailed roadmap for these initiatives. His address will highlight India’s ambition to become a global hub for specialty steel and sustainable industrial practices.
This news was first reported by IANS.
