New PLI Scheme for Steel Sector Launched

January 6, 2025

The Union government is launching a new round of the Production-Linked Incentive (PLI) scheme for the steel sector. This initiative aims to enhance domestic production of specialty steel and reduce import reliance. The announcement was made by the Union Ministry of Steel, with the launch scheduled for January 6, 2025. Union Minister H.D. Kumaraswamy will oversee the launch, inviting applications from interested companies.

Background of the PLI Scheme

The PLI scheme was introduced during the COVID-19 pandemic to stimulate domestic manufacturing. Initially, it covered three sectors but was expanded to include steel in November 2020. The scheme’s primary objective is to encourage investments in specialty steel production.

Achievements of the Previous PLI Scheme

The earlier PLI scheme attracted investments amounting to ₹27,106 crore. It aimed to create approximately 14,760 direct employment opportunities. The estimated production target was set at 7.90 million tonnes of specialty steel. By November 2024, companies had already invested ₹18,300 crore, generating over 8,660 jobs.

Objectives of PLI Scheme 1.1

The new PLI scheme, termed ‘PLI scheme 1.1’, seeks to attract additional investments and improve domestic manufacturing capabilities. The government aims to meet the production targets set in the previous scheme while expanding the list of specialty products eligible for incentives.

Industry Participation and Feedback

The Ministry of Steel has been in regular communication with participating companies. Feedback indicated a need for a new initiative to boost participation. The reopening of the application window will benefit new entrants in the specialty steel market.

Types of Specialty Steel Products

Specialty steel includes high-grade products used in various sectors, such as defence, automotive, and electrical industries. The PLI scheme covers coated or plated steel products, high strength wear-resistant steel, specialty rails, alloy steel products, and electrical steel.

H.D. Kumaraswamy is the Union Minister of Steel and Heavy Industries.
The PLI scheme was initially launched in 2020 during the COVID-19 lockdown.
The first phase of the specialty steel PLI scheme approved 67 applications.
The scheme aims to create 5,25,000 jobs, including 68,000 direct jobs.
The total outlay for the PLI scheme is ₹6,322 crore.

Future Expectations for the PLI Scheme

The PLI scheme is expected to run from 2024-25 to 2030-31. An incentive of approximately ₹775 crore is anticipated for production achieved in 2023-24. The government is optimistic about the scheme’s potential to boost the domestic specialty steel industry.

« Previous Post Next Post »