India: EV sales to increase electrical steel prospects, govt seeks PLI applications

A rising electric vehicle (EV) production will increase the prospects of electrical steel in
India. EV sales can increase cold-rolled non-grain oriented (CRNO) demand in India by an additional 1-1.5 lakh tonnes per annum from the first year of the PLI implementation, SteelMint learnt from sources.

The current demand is 3-3.5 lakh tonnes per annum and around another 3 lakh tonnes for cold-rolled grain-oriented (CRGO) steel.

Total demand for electrical steel in India ranges from 6-7 lakh tonnes per annum, depending on the power sector growth. On years the power sector performs well, electrical steel demand increases. CRGO is required in transformer lamination while CRNO is used across various electrical goods, including fan compressors etc. CRNO has wider applications.

“From present till 2025, demand increase would be around 1-1.5 lakh tonnes per annum, depending on how the EV sector performs,” said the source.

From 2025 till 2030, incremental demand for CRNO may rise by 3-4 lakh tonnes per annum.

Govt invites applications under PLI
Meanwhile, there seems to be renewed activity on the production-linked incentive (PLI) scheme from the government. It recently started seeking applications from investors looking to set up units under the said scheme. The last date for submitting applications is 29 Mar’22.

PLI covers five categories of speciality steel, which include coated/plated products, high strength/wear-resistant steel, speciality rails, alloy steel products, steel wires and electrical steel.

These categories are mainly imported and the government aims to save INR 33,000 crore which is the forex outgo annually for speciality steel. Industries like automobiles, pipes and Defence use the categories covered under PLI.

On 22 Jul’21, the Union Cabinet chaired by Prime Minister Narendra Modi had approved an INR 6,322-crore PLI scheme to boost the production of speciality steel in India, and which is expected to attract an additional investment of about INR 40,000 crore and generate fresh 5.25 lakh job opportunities.