The government has approved the Production Linked Incentive Program (PLI) for special steel, which will run for five years from 2023-24 to 2027-28 with a budget expenditure of Rs 6,322 crore.
The decision was taken by the Union cabinet which met on Thursday.
Official sources said the program is expected to generate investments of around Rs 40,000 crore and lead to an increase in capacity of 25 million tonnes for special steel.
Special steel was chosen as the target segment because of the production of 102 million tons of steel in India in 2020-2021, only 18 million tons of value-added steel or special steel were produced in the country.
Apart from this, out of the 6.7 million tonnes of imports in 2020-21, around 4 million tonnes of imports were made up solely of special steels, which resulted in an outflow of foreign exchange of around Rs 30 000 crores.
Special steel production is expected to reach around 42 million tonnes by the end of 2026-2027. This will ensure that around 2.5 million lakh crore of special steel will be produced and consumed in the country that would otherwise have been imported, sources said.
Likewise, exports of special steels will reach around 5.5 million tons, compared to the current 1.7 million tons of special steels, which represents 33,000 crore of foreign exchange, they added.