PLI Scheme 1.1 for Specialty Steel Launched to Boost Domestic Production and Reduce Imports

Industry-Friendly Changes Aimed at Strengthening India's Steel Sector and Driving Self-Reliance.

Union Minister of Steel and Heavy Industries, Shri H. D. Kumaraswamy, launched the second round of the Production Linked Incentive (PLI) scheme for Specialty Steel, termed PLI Scheme 1.1, on January 6, 2025, at Vigyan Bhavan, New Delhi. The event witnessed participation from senior ministry officials and industry leaders.

Minister Kumaraswamy emphasized that the updated PLI Scheme 1.1 retains the original five product categories—Coated/Plated Steel Products, High Strength/Wear-Resistant Steel, Specialty Rails, Alloy Steel Products & Steel Wires, and Electrical Steel—while introducing flexible investment requirements to encourage broader participation.

The application window for the scheme will remain open from January 6 to January 31, 2025, targeting implementation from FY 2025-26 to FY 2029-30. Notable updates include:

1. Reduced Thresholds for CRGO Steel:

   • Investment requirement lowered to ₹3,000 crore.
   • Capacity creation threshold reduced to 50,000 tonnes.
   • Aimed at encouraging domestic production of Cold-Rolled Grain-Oriented (CRGO) steel, a key material for power transformers.

2. Carry-Forward Production Incentives:

   • Excess production can now be carried forward to the next year to offset shortfalls, ensuring optimal utilization of incentives.

3. Augmented Capacity Inclusion:

   • Companies investing in upgrading existing mills can participate with reduced investment requirements, encouraging modernization.

4. Enhanced Digital Accessibility:

   • A web portal launched during the event facilitates seamless participation and compliance.

Impact of the First PLI Round

The initial PLI scheme for Specialty Steel, launched in July 2021, has already seen 44 active projects by 26 companies, committing ₹27,106 crore in investments and creating 24 million tonnes of downstream capacity. By November 2024, ₹18,300 crore had been invested, generating direct employment for 8,300 individuals.

Minister Kumaraswamy expressed confidence that the updated scheme will bolster India’s position as a global steel powerhouse, reduce imports, and foster innovation in the steel sector.

Promoting Atma Nirbhar Bharat in Specialty Steel

Shri Sandeep Poundrik, Secretary, Ministry of Steel, highlighted the strategic importance of achieving self-reliance in specialty steel production. The new scheme aligns with the broader vision of Atma Nirbhar Bharat by:

• Reducing reliance on imports of high-value steel grades.
• Advancing technological development in domestic steelmaking.
• Encouraging innovation in products catering to sectors like white goods, transformers, and automobiles.

Additional Developments

• Global Outreach for Collaboration: The Ministry is engaging with international technology providers to address gaps in CRGO steel production.
• Skill Development Initiatives: Training programs for workers in specialty steel production are being planned to improve operational efficiency.
• Green Steel Emphasis: The scheme encourages energy-efficient production processes, contributing to India's commitment to sustainability.

Minister’s Vision for PLI 1.1

Shri Kumaraswamy reiterated the government’s dedication to strengthening Brand India in the global steel sector. He encouraged industry stakeholders to seize this opportunity to invest, innovate, and drive India’s steel industry towards achieving self-reliance and global leadership.

The PLI Scheme 1.1 for Specialty Steel is expected to mark a significant milestone in India's industrial progress, ensuring robust growth in capacity, technology adoption, and job creation while reducing the country's dependency on imports.