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Govt launches PLI 1.2 for speciality steel to attract investment in sector
Nov-06-2025

With an aim to boost domestic output and reduce imports, the government has launched the third round of Production Linked Incentive (PLI) Scheme ‘PLI 1.2’ for speciality steel to attract investment in the sector. The Union Steel Minister H D Kumaraswamy has said that the PLI scheme for speciality steel was approved by the Union Cabinet in July 2021 to encourage production of high-value, high-grade steels used in sectors such as defence, aerospace, energy, automobiles, and infrastructure. Further, the scheme with a total outlay of Rs 6,322 crore aims to add about 26 million tonnes of speciality steel capacity over the next few years.

The minister highlighted that the scheme has attracted investment commitments worth Rs 43,874 crore in the first two rounds and is expected to add 14.3 million tonnes of new specialty steel capacity in India. As of September 2025, companies participating in the first two rounds have already invested Rs 22,973 crore and generated 13,284 jobs. He noted that the 'PLI 1.2' is designed to accelerate India's journey towards becoming a global hub for high-grade steel production. He added that the scheme will attract new investments in emerging and advanced categories such as super alloys, CRGO steel, stainless steel long and flat products, titanium alloys, and coated steels, materials that are essential for next-generation industrial and defence applications. The third round will also open up new avenues for both existing and new players, including MSMEs, who have expanded or upgraded their investment plans after the earlier rounds.

In order to encourage investors, there have been some relaxations in the current third round of this scheme. The scheme incentivises incremental production and investment in identified product categories, thereby enhancing value addition within the country and reducing import dependence in critical sectors, such as defence, power, aerospace and infrastructure. The incentive rates range from 4 per cent to 15 per cent, applicable for five years starting 2025-26, with disbursal beginning in the next fiscal. The base year for pricing has also been updated to 2024-25 to better reflect current trends.

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