By TIOL News Service

NEW DELHI, JAN 07, 2025: UNION Minister of Steel and Heavy Industries, H. D. Kumaraswamy, launched the second round of PLI scheme for Specialty Steel, termed as PLI Scheme 1.1 yesterday, in the presence of senior officials from the ministry and captains from the industry at Vigyan Bhavan New Delhi.

H.D. Kumaraswamy said, Ministry of Steel has come out with PLI scheme 1.1 for specialty Steel for five product categories which is the same as the existing PLI Scheme to enable further participation as industry participants requested the ministry for relaxation. 'PLI Scheme 1.1' will remain open from January 6 th to January 31 st, 2025 . He expressed hope that the industry will participate actively to invest and strengthen Brand India, reduce imports, and position India as a global steel powerhouse. The changes made in PLI scheme for specialty steel reflect the government's commitment to strengthening domestic production, fostering innovation, and reducing imports.

Sandeep Poundrik, Secretary, Ministry of Steel, mentioned that the PLI scheme 1.1 shall be implemented during the production period of FY 2025-26 to FY 2029-30. He mentioned that there were no participants in 8 sub-categories in the previous round and hoped there would be wider participation this time. Certain changes have been incorporated with industry consultation to make the scheme more investor friendly, which includes reduction in threshold investment & capacity for the CRGO product sub-categories, allowing carry forward of excess production to the immediately following year for the purpose of claiming incentive and reduction in threshold investment under capacity augmentation mode.

PLI Scheme 1.1 covers five (5) product categories in line with the existing PLI Scheme, namely Coated / Plated Steel Products, High Strength / Wear resistant Steel, Specialty Rails, Alloy Steel Products & Steel wires and Electrical Steel. These products have a wide range of application, from white goods to transformers to Automobiles and other niche sectors. The scheme will operate within the funds originally allocated for the scheme, i.e., Rs.6,322 crore.

Changes to PLI rules have been made based on industry feedback. Not all companies would need to install new mills. Recognising the importance of producing quality steel, energy efficiency and other process improvements, companies investing in augmentation of existing capacities will be allowed to participate in the scheme. Investment in such cases will be 50% of threshold mentioned in Annexure-III to the guidelines which have been uploaded on the web portal launched today by Hon'ble Minister.

Cold-rolled grain-oriented steel (CRGO) is a high-value steel used in production of power transformers used in HT power distribution. The technology to make CRGO is not available with any of the Indian steelmakers. Considering the strategic importance of becoming atmanirbhar in CRGO, Ministry of Steel has been having regular meetings with stakeholders aimed at increasing production of CRGO within the country. By reducing the investment and capacity creation thresholds to Rs.3,000 crore and 50,000 tonnes respectively, Ministry of Steel hopes that the industry would be enthused to participate in the category.

Companies can carry forward excess production to the immediate following year for the purpose of claiming incentive: In case production by a given company in a given sub-category exceeds its committed production for that year, the excess quantum of production may be carried forward for meeting the shortfall, if any, in achieving the committed production of the immediate next year. This will ensure that incentives are distributed optimally, and no company is denied incentives, if they are unable to achieve an incremental production in the following year after a good year.

The first round of Production Linked Incentive (PLI) Scheme for Specialty Steel was notified on July 29 th, 2021 by the Ministry of Steel with a budgetary outlay of ? 6,322 Crore. The objective of the PLI scheme for specialty steel is to promote manufacturing of value-added steel grades within the country and help the Indian steel industry mature in terms of technology as well as move up the value chain. This will also result in reduction in Imports of these grades and will be a step towards Atma Nirbhar Bharat.

In the first round, 44 projects by 26 companies are active with a committed investment of about Rs.27,106 crore and 24 million tonnes of downstream capacity creation . As of November 2024, the actual investment achieved is around Rs 18,300 crore with direct employment generation of around 8,300 nos. Ministry of Steel estimates that the payout for the participants in first round will be about Rs.2,000 crore.

The application window is live from today (the 6th of January 2025) and up to 31st January 2025. Investment made after the opening of portal (i.e., 6th of January 2025) shall be counted for participation in the scheme.

PLI Scheme for specialty steel has brought the issue of developing self-reliance in production of specialty steel to the forefront. Country shall benefit from reduction in imports of specialty steel, achieving 'Atmanirbharta' through capacity creation, ensuring investments leading to job creation and moving up the value chain in steel business.