• A total of 25 companies signed 42 agreements with the government to manufacture high-end steel at an estimated investment of Rs 17,000 crore under the second round of the PLI Scheme for speciality steel.

• In January, Union Minister of Steel and Heavy Industries H.D. Kumaraswamy launched the second round of the PLI scheme for speciality steel, termed PLI Scheme 1.1.

• The companies signed Memorandums of Understanding (MoUs) with the Ministry of Steel to produce five types of high-grade steel.

• In the first round, 44 applications were submitted by 23 companies, with incentives already disbursed for one project.

PLI Scheme for specialty steel 

• India is the second-largest producer and consumer of steel after China. 

• Steel is a de-regulated sector and the government acts as a facilitator by creating a conducive policy environment for the development of steel sector.

• The Indian steel sector has grown exponentially over the past few years, contributing to about 2 per cent of the country’s GDP and employing over five lakh people directly and about 20 lakh people indirectly.

• Speciality steel has been chosen as the target segment because, out of the production of 102 million tonnes (MT) steel in India in 2020-21, only 18 MT value added steel/speciality steel was produced in the country.

• India presently operates at the lower end of the value chain in the steel sector. Value added steel grades are largely imported in India. 

• In July 2021, the government approved a Rs 6,322-crore production linked incentive (PLI) scheme to boost production of specialty steel in India, attract fresh investments and create new job opportunities in the sector.

• The scheme is expected to play an important role in strengthening the domestic steel value chain and will incentivise the steel sector to invest in technological capability building to contribute to the global steel value chain by producing value added steel. 

• Incentives worth Rs 6,322 crore will be provided over a period of five years, and the move will help create over 5.25 lakh job opportunities.

• It will boost manufacturing and help in reducing imports.

• The scheme will attract an additional investment of about Rs 40,000 crore and lead to a capacity addition of 25 million tonnes (MT).

• The duration of the scheme will be five years. 

Second round of the PLI Scheme

• Second round of the PLI Scheme for specialty steel was launched on January 6, 2025, within the overall budget allocated for the scheme. 

To ensure wider participation in the second round, irrespective of the company size, following steps have been taken:

i) Launch of dedicated web portal for PLI scheme 1.1.

ii) Easing of rules of participation in the scheme such as allowing 50 per cent of investment in cases where companies invest in augmentation of existing facilities to participate in the notified sub-categories.

PLI Scheme 1.1 covers five product categories in line with the existing PLI scheme, namely:

a) Coated/plated steel products

b) High strength/wear-resistant steel

c) Speciality rails

d) Alloy steel products 

e) Steel wires and electrical steel.

• These products have a wide range of applications, from white goods to transformers to automobiles and other niche sectors.

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