The government is set to introduce a new phase of its production-linked incentive (PLI) scheme aimed at the steel sector this coming Monday. The ‘PLI Scheme 1.1’ will be officially launched by Steel Minister H D Kumaraswamy. According to a statement from the steel ministry, “Union Minister of Steel and Heavy Industries will introduce ‘PLI Scheme 1.1’ for the steel industry and invite applications on January 6.”
This initiative seeks to bolster domestic production of specialty steel while reducing imports by attracting capital investments. The initial PLI scheme for specialty steel has successfully attracted investments amounting to Rs 27,106 crore, which is projected to create approximately 14,760 direct employment opportunities, with an estimated output of 7.90 million tonnes of specialty steel. As of November 2024, participating companies have invested Rs 18,300 crore and generated over 8,660 jobs.
To enhance participation, the government has maintained regular communication with the involved companies. Based on the feedback received, it was determined that a renewed notification of the scheme could further stimulate interest, as outlined in the ministry’s statement.
The notion of Production-Linked Incentives (PLI) was developed during the global lockdowns prompted by Covid-19 in 2020, highlighting the necessity to enhance domestic manufacturing capabilities.
The PLI scheme was initially implemented across three sectors and was subsequently expanded to encompass steel in November 2020. The government has previously indicated its commitment to a new round of the PLI scheme for specialty steel, as the initial response fell short of expectations. There remains a significant need for improvement in the specialty steel sector. The government had established a PLI framework to encourage the production of specialty steel; however, the uptake of incentives was not as anticipated.
Specialty steel represents a premium product that is utilised in various industries, including defence, automotive, and electrical sectors, among others.
