Government Unveils Revamped PLI 1.1 Scheme For Specialty Steel

The Indian government launched the Production-Linked Incentive (PLI) 1.1 scheme for specialty steel on Monday, unveiling a revamped version designed to attract greater investment in the sector. This updated scheme aims to reduce India’s reliance on imports of specialty steel by offering more accessible incentives to companies.

The government has lowered the investment threshold to 50% to make the PLI 1.1 more investor-friendly. Under the new scheme, companies can qualify for incentives even if they direct investments towards augmenting their existing manufacturing capacities. This adjustment is a direct response to industry feedback, ensuring the scheme aligns with current market needs.

“The second round of PLI reflects the industry’s feedback and focuses on critical product categories that drive sectors like infrastructure, renewable energy, and automobiles,” said HD Kumaraswamy, Minister of Steel, at the scheme’s launch.

Targeted Revisions For Specific Steel Products

In a significant change, the government reduced the investment threshold for Cold Rolled Grain Oriented (CRGO) steel from ₹5,000 crore to ₹2,000 crore. It also lowered the required capacity creation for CRGO steel from 200,000 tonnes to 50,000 tonnes.

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These adjustments aim to increase production capabilities and help companies meet targets more feasibly. Furthermore, the new scheme allows companies to carry forward any excess capacity created beyond their annual target to the following year.

Addressing Capacity Shortages

According to Steel Secretary Sandeep Poundrik, India currently faces a shortage of specialty steel production. “We have 50,000 tonne CRGO steel capacity, but the consumption is 1.2-1.3 lakh tonnes,” Poundrik noted, emphasizing the urgent need for increased domestic production to meet growing demand.

PLI 1.1 has been funded by reallocating about ₹4,400 crore from the unused portion of the earlier PLI 1.0 scheme. Applications for the PLI 1.1 scheme opened on Monday and will remain open until the end of January.

With these revisions, the government hopes to stimulate growth in India’s specialty steel industry, reduce import dependency, and foster innovation in key sectors.