New Delhi, Feb 22 (KNN) In a move reflecting strategic foresight, the Union Steel Ministry has decided to temporarily halt the implementation of the PLI 2.0 scheme targeting speciality steel.

The rationale behind this decision is to conduct a comprehensive review of the ongoing Phase 1's performance before proceeding with further initiatives, reported business line.

The evaluation process will encompass critical factors such as the efficiency in rolling out products, the financial implications incurred, and the current market demand landscape.

Additionally, officials are contemplating the possibility of integrating new proposals within an updated policy framework.

The ambit of PLI 2.0 was designed to encompass a wide array of segments including coated & plated steel, high-strength alloys, speciality rails, among others.

Notably, the scheme aimed to cater to strategic sectors such as defence and infrastructure, underscoring its significance in bolstering key national interests.

While there is a prevailing anticipation for interest in specialised steel production, the decision-making process is notably influenced by the prolonged gestation periods and substantial capital investments involved.

Thus, decisions regarding the scheme's advancement are contingent upon the evolving dynamics of the market.

Priority attention is currently directed towards the seamless implementation of PLI 1.0.

However, challenges have surfaced, as indicated by the non-receipt of acknowledgments from 13 approved applications, attributed to various factors including shifting demand patterns and regulatory hurdles.

Furthermore, the global steel market continues to grapple with subdued demand, with oversupply issues in the Chinese market exerting a considerable drag-down effect.

Despite the challenges, progress is evident, with five companies having commenced specialised steel production under PLI 1.0, and an additional nine companies poised to introduce coated steel products in the upcoming fiscal quarter.

However, operational hurdles persist, with delays in project commissioning attributed to geopolitical tensions and bureaucratic obstacles.

Notably, investments totalling Rs 13,000 crore have already been realized under PLI 1.0, comprising 43 per cent of the proposed outlay.

Looking ahead, the Ministry anticipates additional investments ranging from Rs 3,000 crore to Rs 5,000 crore by the end of FY24, culminating in a substantial cumulative investment of Rs 18,000 crore.

Efforts are underway to address operational challenges and ensure the timely commissioning of projects involving speciality steel.

(KNN Bureau)