Indian steel ministry draws up incentive levels for steel industry

Monday, 21 December 2020 15:53:28 (GMT+3)   |   Kolkata
       

India’s Ministry of Steel has drawn up three levels - three percent, six percent and nin percent - for incentives for production of special steels under the government’s Production Linked Incentive (PLI) Scheme announced earlier this year, government officials said on Monday, December 21.

The highest rate of a nine percent incentive will be made available for commencing production of steel products that are entirely being imported into the country, like pipes and tubes for the oil and gas industry and head-hardened steel rails.

The second incentive level of six percent will be offered for achieving incremental domestic production of electro-galvanized steel and tin-coated steel products and with the potential of achieving export capabilities within the period of the next five years.

The third level of incentive of three percent will be available for incremental production of aluminium-zinc coated steel and heat-treated hot rolled coils.

The officials said that producers of rebars, stainless steel and alloy steel products have also approached the government to be made eligible for the PLI, but the ministry is yet to take a decision on creating incentive levels for this segment.

The Indian government announced the PLI Scheme in November for 10 industrial sectors, to augment domestic production and increase the export capacities of these industries.

The government has earmarked offering INR 6.32 billion ($866 million) as incentives over a five-year period for the steel industry to ramp up domestic production of special steels.

The incentives offered will be calculated based on achieving incremental output after a base year, with a percentage value of incremental output being offered to the producer. For example, nine percent of the value of incremental production of steel products currently being imported will be offered to the producer subject to a ceiling of INR 2,000 million ($27 million) each year.


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