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India Launches New PLI Scheme for Steel Sector

The Indian government is launching a new round of the Production-Linked Incentive (PLI) scheme for the steel industry, called "PLI scheme 1.1." This aims to increase domestic production of specialized types of steel and reduce the need for imports.  

Here's a simplified explanation:

What is the PLI scheme? A government program that gives financial incentives to companies that increase their manufacturing in India.  

Why is there a PLI scheme for steel? To encourage companies to produce more "specialty steel" in India.

What is "specialty steel"? High-quality steel used in industries like defense, cars, and electronics.

When was the PLI scheme first introduced? During the COVID-19 pandemic in 2020 to boost manufacturing. Steel was added to the scheme in November 2020.  

What did the first PLI scheme for steel achieve?

  • Attracted ₹27,106 crore (approximately $3.25 billion USD) in investments.

  • Created about 14,760 direct jobs.

  • Aimed to produce 7.90 million tonnes of specialty steel.  

  • By November 2024, companies had already invested ₹18,300 crore and created over 8,660 jobs.  

What are the goals of the new PLI scheme (1.1)?

  • Attract even more investment.

  • Improve domestic manufacturing of specialty steel.

  • Meet the production targets from the first scheme.

  • Include more types of specialty steel products for incentives.

Why is the government launching a new scheme? Companies gave feedback that a new push was needed to increase participation. This new scheme will also allow new companies to enter the specialty steel market.

What types of specialty steel are covered by the PLI scheme?

  • Coated or plated steel.  

  • High-strength wear-resistant steel.  

  • Special rails.  

  • Alloy steel.

  • Electrical steel.  

Key People/Facts:

  • H.D. Kumaraswamy: Union Minister of Steel and Heavy Industries.  

  • The PLI scheme was launched in 2020 during the COVID-19 lockdown.  

  • The first phase of the steel PLI scheme approved 67 applications.  

  • The overall PLI scheme aims to create many jobs, including 68,000 direct jobs in the steel sector.

  • The total budget for the PLI scheme is ₹6,322 crore.

How long will the PLI scheme run? From 2024-25 to 2030-31.

What are the expected incentives for the next year? About ₹775 crore for production in 2023-24.  

In simple terms: The Indian government is restarting a program that gives money to companies that make special types of steel in India. This is to reduce the need to import steel and to create more jobs in the country. The first version of the program was successful, so the government is launching a new version with even more incentives

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