Government launches PLI scheme 1.1 for specialty steel

Union Minister of Steel and Heavy Industries H. D. Kumaraswamy launched the second round of the Production Linked Incentive (PLI) scheme for specialty steel, termed PLI Scheme 1.1, on Monday at Vigyan Bhawan in the presence of senior ministry officials and industry leaders.

The new scheme aims to boost domestic production and reduce dependence on imports. Addressing the gathering, Kumaraswamy stated that PLI Scheme 1.1 covers five product categories, similar to the original scheme, and has been introduced following requests from industry participants for certain relaxations.

The scheme will remain open for applications from January 6 to January 31, 2025. The minister expressed optimism that this revised round would see active participation from industry players, strengthening India’s position as a global steel powerhouse.

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Changes introduced in PLI Scheme 1.1, based on industry feedback, include reducing the threshold for investment and capacity requirements in certain sub-categories, such as cold-rolled grain-oriented steel (CRGO), a high-value product used in power transformers.

The revised thresholds aim to encourage participation and investments, with a focus on energy efficiency and quality steel production. Sandeep Poundrik, Secretary, Ministry of Steel, emphasized that PLI Scheme 1.1 will be implemented during the production period from FY 2025-26 to FY 2029-30.

He noted that there were no participants in eight sub-categories during the first round of the scheme but expressed hope for broader participation this time. The five product categories covered under PLI Scheme 1.1 include Coated/Plated Steel Products, High Strength/Wear Resistant Steel, Specialty Rails, Alloy Steel Products & Steel Wires, and Electrical Steel.

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The total budgetary allocation for the PLI scheme remains at Rs. 6,322 crore, with changes to the scheme designed to make it more investor-friendly. Notably, companies investing in augmenting existing capacities will be allowed to participate, with the investment threshold reduced by 50% in such cases.

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