PLI Scheme 1.2 for Speciality Steel

• The Ministry of Steel signed Memorandum of Understanding (MoUs) for 85 projects of 55 companies under the Production-Linked Incentive (PLI) Scheme 1.2 (third round) for specialty steel in New Delhi on February 9.

• Participating companies in this round have committed an investment of Rs 11,887 crore and a committed capacity of 8.7 million tonnes in downstream steel and alloy making.

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.

• Steel production is one of the major economic growth indicators in the country and plays a crucial role in the nation’s growth story. 

• Specialty steel is a value-added steel, made by processing normal finished steel through coating, plating and heat treatment. 

• Besides the automobile and specialised capital goods sector, applications for this type of value-added steel (specialty steel) can be found in other industries like defence, space, power, etc.

• 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.

• Under PLI 1.0, the committed outcomes include Rs 27,106 crore of investment, 14,760 direct jobs, and 7.9 million tonnes of production capacity. 

Second round of PLI scheme

• The Ministry of Steel launched the second round of the PLI Scheme on January 6, 2025, termed as PLI Scheme 1.1.

• PLI 1.1 was expected to attract investment of about Rs 17,000 crore, generate around 16,000 jobs, and add 6.4 million tonnes of production capacity.

• An incentive of Rs 236 crore has been disbursed to participating companies so far in the scheme.

Third round of PLI scheme

• PLI 1.2 was launched on November 4 2025, covering 22 product sub-categories under four product categories, namely: 

i) Steel Grades for Strategic Sector

ii) Commercial Grades – Category 1

iii) Commercial Grades – Category 2

iv) Coated & Wire Products. 

• The scheme offers incentive rates ranging from 4 to 15 per cent for a period of five years, commencing from FY 2025-26, with incentive disbursement starting from FY 2026-27.