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 in the presence of senior ministry officials and industry leaders at Vigyan Bhawan.
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, contributing to strengthening India’s position as a global steel powerhouse.
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, emphasised 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. These products have applications across diverse sectors such as white goods, automobiles, infrastructure, and power transformers.
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.
Kumaraswamy highlighted the government’s commitment to fostering domestic innovation and reducing reliance on imports, particularly in strategically important categories like CRGO. By lowering the investment requirement to Rs. 3,000 crore and the capacity creation threshold to 50,000 tonnes, the ministry hopes to attract more investment in this critical area.
In addition, companies producing more than their committed output in any year will be able to carry forward excess production to the next year, ensuring optimal distribution of incentives.
The first round of the PLI scheme, notified in July 2021, saw 44 projects from 26 companies, with a committed investment of Rs. 27,106 crore and the creation of 24 million tonnes of downstream capacity.
As of November 2024, actual investment stood at Rs. 18,300 crore, generating around 8,300 direct jobs. The Ministry of Steel estimates that Rs. 2,000 crore in incentives will be disbursed to participants in the first round.
The application window for PLI Scheme 1.1 is open from January 6 to January 31, 2025, with investments made after January 6 eligible for the scheme.
The PLI scheme for specialty steel is a critical component of India’s efforts to achieve Atmanirbharta (self-reliance), reduce imports, and move up the value chain in the steel industry, contributing to job creation and economic growth.