Steel Ministry’s PLI 1.2 Drive to Add 8.7 Million Tonnes of Specialty Steel Capacity

The Ministry of Steel has taken a major step towards strengthening India’s specialty steel ecosystem by signing memorandums of understanding with 55 companies for 85 projects under the third round of the Production Linked Incentive Scheme 1.2. The agreements were signed at Vigyan Bhawan in New Delhi, marking another milestone in the government’s broader Make in India manufacturing push.

Under this latest round, participating companies have committed investments worth Rs 11,887 crore, which will lead to the creation of 8.7 million tonnes of additional capacity in downstream steel and alloy manufacturing. The projects are expected to play a crucial role in expanding India’s capability to produce high value and specialty steel grades that are currently imported in significant quantities.

The PLI Scheme for Specialty Steel has been designed to improve domestic manufacturing competitiveness by encouraging companies to invest in advanced technology, improve product quality and scale up production. With infrastructure development, renewable energy, defence manufacturing and automotive sectors driving steel demand, the focus on specialty grades has become increasingly important for India’s long term industrial growth.

The third round builds on the progress achieved under earlier phases of the scheme. PLI 1.0, launched in 2021, attracted committed investments of Rs 27,106 crore and added nearly 7.9 million tonnes of production capacity, while also generating over 14,700 direct jobs. PLI 1.1, rolled out in January 2025, is expected to bring in investments of around Rs 17,000 crore and add 6.4 million tonnes of capacity along with substantial employment generation.

PLI 1.2, launched in November 2025, covers 22 product sub categories across strategic steel grades, commercial grades and coated and wire products. Incentives ranging from 4 per cent to 15 per cent will be offered over a five year period starting FY26, with disbursements beginning from FY27. So far, incentives of Rs 236 crore have already been released under the overall scheme.

For the steel sector, this round of PLI commitments is expected to reduce import dependence, conserve foreign exchange and strengthen India’s position as a reliable global supplier of high value specialty steel. The Ministry has reiterated its support to ensure timely investments, project commissioning and sustained production, which will be critical for translating these commitments into on ground capacity additions.