GS-2: International Institutions
Key Points:
- The U.S. questioned India’s Production Linked Incentive (PLI) scheme for speciality steel at the WTO, citing trade rule concerns.
- India defends the scheme as essential for reducing imports and boosting self-reliance.
- India remained a net steel importer in FY25.
- The ₹6,322 crore scheme is modest compared to China’s $50 billion steel subsidies.
In-Depth Analysis:
- Issue:
- U.S. claims the PLI scheme distorts global steel markets.
- India argues it addresses import dependency, not global oversupply.
- PLI Objectives (Steel):
- Launched in 2021 with ₹6,322 crore for steel.
- Aims to produce high-grade steel, reduce imports, and attract investment.
- WTO Compliance:
- No export obligations, aligning with WTO rules.
- Incentives tied to domestic production and sales.
Technical Concepts:
- Speciality Steel: High-grade steel for aerospace, defense, and EVs.
- PLI Scheme: Subsidies based on incremental production to promote domestic manufacturing.
Importance:
- Enhances strategic autonomy in critical sectors.
- Asserts India’s industrial policy within WTO norms.
Reflects tensions between national policies and global trade rules.