NEW DELHI: The government is working on a second leg of the performance-linked incentive (PLI) programme for the steel sector, focused on import substitution. “The steel ministry is likely to come up with PLI-2 which will further take care of the requirements of the Indian Railways and various other segments,” steel secretary Nagendra Nath Sinha told ET.
Companies participating in the first phase of the PLI scheme for the sector have committed to an investment of ₹29,530 crore, with a downstream capacity addition of 24.78 million tonnes. The government has earmarked ₹6,322 crore for providing incentives to the steel sector under the PLI plan.
Results of the scheme will be visible from 2026, Sinha said, responding to a query on the demand for steel products from the Indian Railways and the need for imports to meet them.
“The steel ministry is pursuing with the Indian steel sector to take urgent initiatives to meet the domestic requirements of the Indian Railways,” he said, adding that agreements have been signed by Steel Authority of India Ltd (SAIL) for asymmetric and hardened rail for the special grade requirements of the railways.
State-run SAIL is currently meeting the national transporter’s entire requirement of R-260 grade steel for rails.
“The requirement of new head hardened grade of rails in R-350/1175 grade is also likely to be produced in 2023 by SAIL and supplied to the Indian Railways,” Sinha said. Once deployed, these tracks will allow faster movement of trains. The Indian Railways is fast upgrading rolling stock with modern Vande Bharat trains, but antiquated track infrastructure currently curtails speed.
Despite its critical role in India’s infrastructure creation, the domestic steel sector faces shortage of rail rakes during peak power demand months, as those will be diverted for transporting coal to power plants.
Commenting on this, the steel secretary said: “New projects have been launched to address the requirement of freight traffic including the steel sector…More than 2,000 wagons per month are being inducted now to improve the level of wagons availability.”
Newer grades of steel for containers have been introduced by the Bureau of Indian Standards for which licences have been issued to SAIL, Tata Steel and JSW Steel, he said.