India’s Ministry of Steel to Revamp PLI Scheme for Specialty Steel

India’s Ministry of Steel is revising the Production-Linked Incentive (PLI) scheme to revitalize the prospect of the specialty steel sector and further streamline the eligibility process for boarders. The government expects in the coming weeks this revised scheme will draw a larger number of participants while fostering innovation in the steel sector.

In support of burgeoning production capacities, the original PLI scheme announced in 2021 had set aside $765 million.

However, the scheme currently restricts eligibility to brownfield projects, focusing on expansions of existing facilities. In a significant shift, the revised framework may extend eligibility to greenfield investments, encouraging new ventures in specialty steel production.

Another potential change includes incentivizing green steelmaking processes for existing mills. It aligns with global sustainability trends and India’s attempt to bring out modalities to reduce carbon emissions from the steel industry. Incentives of the updated scheme could accrue to companies introducing high-value specialty steel products, hence promoting diversification and value addition.

The revisions of the scheme are based on continuous consultations with stakeholders. Various rounds of talks with industry leaders have taken place so that implementable and futuristic interventions are made. The Ministry intends to address delays in project execution that have hindered the disbursal of funds under the existing scheme.

While the total corpus remains substantial, disbursements have been modest. The government expects to release $6 million in incentives by 2025, a small fraction of the total allocation. The underutilization is mainly ascribed to delays in the completion of projects that came under the ambit of benefits.

This overhaul of the PLI scheme is expected to create a new impetus for India’s steel industry in enabling growth, sustainability, and global competitiveness in specialty steel production. This will be done by loosening up conditions, including, to some extent, the infusion of green and innovative practices. Accordingly, the government hopes to pave the way for wider participation, thus negotiating better fund utilizations.