Government to Launch New Round of PLI Scheme for Steel Sector on Monday

The government will roll out a new phase of the Production-Linked Incentive (PLI) scheme for the steel sector on Monday. Known as ‘PLI Scheme 1.1,’ it will be launched by Steel Minister H. D. Kumaraswamy.

“Union Minister of Steel and Heavy Industries will officially launch ‘PLI Scheme 1.1’ for the steel industry and invite applications starting January 6,” the Ministry of Steel announced in a statement.

The PLI scheme aims to boost domestic production of specialty steel, reduce imports, and attract significant capital investments. The previous iteration of the scheme secured investments worth ₹27,106 crore, promising the creation of 14,760 direct jobs and a projected production of 7.90 million tonnes of specialty steel.

By November 2024, participating companies had already invested ₹18,300 crore and created over 8,660 jobs. Regular interactions with these companies revealed potential to broaden participation, prompting the government to relaunch the scheme, according to the statement.

The PLI concept was first introduced in 2020 during the Covid-19 pandemic to strengthen domestic manufacturing. Initially covering three sectors, it was expanded to include steel in November 2020. However, the first round of the scheme for specialty steel did not achieve the desired results.

Specialty steel, a high-grade material vital for industries such as defense, automotive, and electrical, remains a critical area for development. The government had acknowledged that the uptake of incentives in the initial phase was below expectations. This new round aims to further incentivize the production of specialty steel, addressing gaps and encouraging greater participation from the industry.