Supply chain delays impact investment in speciality steel PLI: Govt

Investments in the steel sector have a long gestation period and depend on the procurement of various equipment. Often some of these equipment are sourced from abroad.

Selected companies have invested about Rs 12,900 crore in the domestic steel sector under the production-linked incentive (PLI) scheme for specialty steel till December and another Rs 3,000 crore is expected during the current financial year (FY24), the government said on Wednesday.

The government is hoping to see an investment of Rs 15,900 crore under the PLI scheme for specialty steel against an investment commitment of Rs 21,000 crore in the FY24, the steel ministry said in a statement.

“Delays due to unavoidable circumstances in the projects include supply chain delays due to geopolitical issues, unforeseen events, natural disasters and changed market circumstances for certain PLI products also have an impact on the pace, phasing, and the quantum of investment,” the ministry said.

 

Besides, investments in the steel sector have a long gestation period and depend on the procurement of various equipment. Often, the equipment is sourced from abroad.

The Ministry of Steel envisages an investment worth Rs 10,000 crore in the next financial year.

“It is also pertinent to mention that five units have begun production, and nine more units are expected to begin production in this quarter,” the statement said.

Under the PLI scheme for specialty steel, 57 agreements have been executed for generating an investment of Rs 29,500 crores, an additional capacity of 25 metric tonnes (MT) for producing specialty steel grades, and employment to about 17,000 people by FY28. The scheme was notified in July 2021.