The Ministry of Steel is exploring modifications to the Production-Linked Incentive (PLI) scheme for specialty steel, aiming to expand its coverage and relax investment norms. Proposed changes could include adjustments to capital expenditure requirements or the addition of value-added products, such as wires and stainless steel components for sectors like defense, according to officials familiar with the discussions.
There is also consideration for incorporating green steel-making processes into the revised PLI guidelines. These updates, informally referred to as “PLI 1.1” during industry meetings, are expected to be finalized in the coming weeks.
Industry stakeholders have suggested that the current eligibility criteria, which prioritize greenfield investments, be relaxed to include new product lines classified as brownfield expansions. These projects, while not greenfield, involve substantial capital investments and could benefit from PLI incentives.
The original PLI scheme for specialty steel was introduced in July 2021 with a planned outlay of ₹6,500 crore, although the notified amount was later reduced to ₹2,500 crore. By October 2024, investments under the scheme had reached ₹17,500 crore, with commitments projected to grow to ₹21,000 crore by FY25. Initial disbursals under the scheme, estimated at ₹40–50 crore, are expected in FY25.
Despite progress, some delays have been reported, primarily due to issues such as visa restrictions for Chinese nationals and equipment supply chain disruptions. Officials have confirmed that these challenges have been addressed.
Of the 67 applications approved under the initial PLI scheme, 54 memorandums of understanding (MoUs) were signed, while 13 applicants opted out due to factors like changing market demand, high capital costs, environmental clearance delays, and land-related disputes. The Steel Ministry is working to refine the PLI scheme, ensuring it meets industry needs while driving investment and innovation in specialty steel production.
