Government set to launch another round of PLI scheme for steel sector on Monday

The government will launch another round of production-linked incentive (PLI) schemes for the steel sector on Monday. The new scheme, referred to as 'PLI Scheme 1.1,' will be introduced by Steel Minister H.D. Kumaraswamy. According to a statement from the steel ministry, "Union Minister of Steel and Heavy Industries will launch 'PLI Scheme 1.1' for the steel industry and call for applications on January 6."

To promote domestic production of specialty steel and reduce imports by attracting capital investments, the government previously introduced a PLI scheme for specialty steel. This initiative has already attracted investments worth Rs 27,106 crore, creating 14,760 direct employment opportunities and an estimated production of 7.90 million tonnes of specialty steel. As of November 2024, companies have invested Rs 18,300 crore, generating over 8,660 jobs.

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The government has been interacting regularly with the participating companies and based on feedback, it was felt that there was a scope to notify the scheme again to attract more participation, the statement said. The concept of Production-Linked Incentives (PLI) was conceived during the Covid-induced global lockdowns of 2020, emphasizing the need to boost domestic manufacturing.

Initially launched for three sectors, the PLI scheme was later extended to include steel in November 2020. The government had earlier said that it is working on another round of the PLI scheme for specialty steel as the response for the first round of the initiative did not meet expectations.

Specialty steel is still one area where more is needed to be done. The government brought a PLI to incentivize the manufacturing of specialty steel but the offtake of the sops was not as expected, the government had earlier said. Specialty steel is a high-grade product used in sectors like defense, automobile, and electrical, among others.

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