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India Plans Second Phase of PLI to Reduce Imports

The Indian government is actively planning a second phase of the Performance-Linked Incentive (PLI) program for the steel sector, primarily aimed at reducing imports. Nagendra Nath Sinha, the Secretary of Steel, disclosed that the Ministry of Steel is preparing PLI-2, focusing on addressing the specific requirements of the Indian Railways and other crucial segments within the industry.

In the first phase of the PLI scheme for the steel sector, participating companies committed to investments totalling ₹29,530 crores, resulting in an additional downstream capacity of 24.78 million tonnes. The government has earmarked ₹6,322 crore in incentives for the steel sector under the PLI initiative.

Sinha emphasised that the results of this scheme will begin to materialise from 2026, particularly in terms of meeting the Indian Railways’ demand for steel products and reducing dependence on imports.

Regarding the Indian Railways’ steel needs, Sinha stressed the importance of swift action by the Indian steel sector. Agreements have already been inked by the State-owned Steel Authority of India Ltd (SAIL) to supply asymmetric and hardened rail, meeting the railways’ special-grade requirements. Currently, SAIL fully fulfills the R-260 grade steel requirement for rails.

Additionally, Sinha mentioned that SAIL is expected to produce the new head-hardened grade of rails in R-350/1175 grade in 2023, contributing to faster train movement. The modernization of track infrastructure is vital as the Indian Railways upgrades its rolling stock, including advanced Vande Bharat trains.

Despite the steel sector’s critical role in India’s infrastructure development, it faces challenges, such as a shortage of rail rakes during peak power demand periods when they are diverted for coal transportation to power plants. Sinha assured that new projects have been initiated to enhance freight traffic and improve wagon availability, with over 2,000 wagons being introduced monthly.

Additionally, the Bureau of Indian Standards has introduced newer grades of steel for containers, with licenses issued to SAIL, Tata Steel, and JSW Steel to ensure compliance and quality standards.


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