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PLI 2.0: Govt working on PLI 2.0 for steel sector in 2024; industry players await steps to curb steel imports

The government is working on the Production Linked Incentive (PLI) scheme 2.0 and ensuring raw material supply for the steel sector in 2024, according to Union minister Faggan Singh Kulaste. The steel industry has shown strong recovery post the pandemic, with production of crude steel up by 14.5% and consumption of finished steel up by 14% during the April-November period this year.

India aims to have a steel manufacturing capacity of 300 MT by 2030, currently standing at around 161 MT. The government is planning PLI 2.0 for the steel sector, focusing on promoting the use of scrap and new technologies to increase steel output while reducing carbon emissions.

The Indian Steel Association (ISA) has raised concerns about surging imports and high raw material prices, especially from China and Vietnam. India heavily relies on imports for coking coal, with the ISA expecting steel production to be between 123-127 MT in FY24.

Tata Steel has noted demand recovery in infrastructure and auto sectors, while ArcelorMittal Nippon Steel India and JSW Steel have highlighted the challenges faced by the sector due to economic fluctuations and supply chain disruptions. The steel demand in India is expected to accelerate faster than GDP, supported by government spending on infrastructure and construction segments.

Ratings agency Crisil predicts elevated steel imports around 6 MT this fiscal, with domestic steel consumption growing at a strong rate. ICRA has noted strong domestic steel consumption growth during April-November FY24, driven by government infrastructure spending ahead of the upcoming Union elections.

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