Booster dose: Centre to launch PLI Scheme 1.1 for steel sector, stimulating investments and job creation

The government is set to launch a new phase of its production-linked incentive (PLI) scheme for the steel sector on January 6. The ‘PLI Scheme 1.1’ will be unveiled by Steel Minister HD Kumaraswamy. 

According to a statement from the Ministry of Steel, “Union Minister of Steel and Heavy Industries will launch ‘PLI Scheme 1.1’ for the steel industry and invite applications on January 6.” 

The PLI scheme for specialty steel was introduced to boost domestic production and reduce imports by attracting capital investments. The initiative has already secured Rs 27,106 crore in investments, aiming to create 14,760 direct jobs and produce an estimated 7.90 million tonnes of specialty steel. 

By November 2024, companies had invested Rs 18,300 crore, creating over 8,660 jobs. 

The government has been in regular contact with participating companies, and based on their feedback, it was decided to relaunch the scheme to encourage greater participation, the statement noted. 

The PLI concept was first introduced during the global lockdowns of 2020 during the Covid-19 pandemic to stimulate domestic manufacturing. Initially launched for three sectors, the scheme was expanded to include steel in November 2020. 

While the first round of the PLI scheme for specialty steel did not meet expectations, the government has emphasized the need for more efforts in this area. Specialty steel, which is vital for sectors such as defense, automobiles, and electronics, remains an area requiring further development. The government had previously acknowledged that the uptake of the scheme’s incentives had fallen short of expectations. 

The ministry previously stated that investments in the steel sector have a long development timeline, influenced by factors such as the procurement of equipment, much of which is sourced from abroad. 

Project delays are caused by unavoidable circumstances, including supply chain disruptions due to geopolitical issues, unforeseen events, natural disasters, and market fluctuations, among others. 

In collaboration with other relevant government agencies, the ministry has been working closely with PLI beneficiaries to address the challenges faced by companies and assist them in fulfilling their commitments. 

Steps have been taken to accelerate project clearances, implement standard operating procedures for Indian visas for experts, and maintain continuous engagement with stakeholders to address the concerns of participating companies.