Inclusion of Refractories in PLI Scheme 2.0 Likely

The Centre's focus on augmenting India's steel production capacity to 300 million tonnes by 2030 has prompted discussions on including refractories in the upcoming
Refractories
RefractoriesImage Source - Alteo

The Centre's focus on augmenting India's steel production capacity to 300 million tonnes by 2030 has prompted discussions on including refractories in the upcoming Production Linked Incentive (PLI) Scheme 2.0. Refractories, vital for steel production, have become a significant concern due to India's heavy dependence on imported raw materials. The Ministry of Steel is actively engaging with the refractory industry to design an incentive policy that stimulates domestic production and reduces reliance on imports from China.

During a recent meeting with industry stakeholders in Kolkata, Abhijit Narendra, Joint Secretary of the Ministry of Steel, highlighted the steel industry's significant reliance on refractories. Presently, the sector consumes 70% of the total refractory output. Achieving the ambitious goal of doubling steel capacity within the next 6-7 years necessitates focused attention on developing a sustainable supply of this crucial raw material.

The PLI Scheme 2.0, soon to be announced, aims to provide financial incentives to support domestic manufacturing and attract investments. Discussions are currently underway to incorporate refractories into the scheme. Under the previous PLI scheme, the government approved Rs 6,322 crore to boost the steel sector, leading to an anticipated investment of around Rs 30,000 crore and the creation of an additional 25 million tonnes of specialty steel production in the next five years.

Although refractories account for only 2-3% of steel production costs, they play an indispensable role in the steel-making process. Experts emphasize that not a single tonne of steel can be produced without this essential component.

The refractory sector, valued at Rs 15,000 crore, faces challenges in sourcing raw materials and dependence on imports from China. By incentivizing domestic production, the PLI scheme aims to address these issues and foster collaboration between the refractory and steel sectors. The government's focus on bolstering domestic manufacturing and attracting investments aligns with its broader objective of achieving self-sufficiency in critical sectors.

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