The Government of India has launched the third round of the Production-Linked Incentive (PLI) Scheme for Specialty Steel, designated as PLI Scheme 1.2, with the signing of 85 memoranda of understanding (MoUs) involving 55 companies. The projects entail a committed investment of INR 118.87 billion and are expected to add 8.7 million tonnes of specialty steel capacity by the end of FY 2030–31.
The MoUs were signed on 09 February 2026 at Vigyan Bhawan in New Delhi. According to a press release issued by the Ministry of Steel, the scheme aims to strengthen domestic manufacturing of high-value steel products and reduce import dependence in critical steel grades used across strategic and industrial sectors.
Addressing industry participants after the MoU signing, Union Minister for Steel and Heavy Industries H.D. Kumaraswamy said the scheme is intended to support the creation of a competitive specialty steel ecosystem through domestic capacity expansion and technology adoption. “PLI 1.2 seeks to address structural gap by incentivising domestic production, conserving foreign exchange, and positioning India as a reliable global supplier of advanced steel,” Kumaraswamy said.
The projects approved under PLI Scheme 1.2 are expected to expand production capacity in segments such as electrical steel, alloy steel, stainless steel, coated steel products and other specialised grades required for automobiles, railways, defence, electrical equipment and aerospace. The third round of the scheme was introduced in response to sustained industry demand for incentives to support investment in advanced steelmaking capabilities.
PLI Scheme 1.2 offers incentive rates ranging from 4 percent to 15 percent over a period of five years. The incentive period commences from FY 2025–26, with disbursements scheduled to begin from FY 2026–27. The scheme covers 22 product sub-categories grouped under four product categories, including steel grades for strategic sectors, two categories of commercial grades, and coated and wire products.
The Ministry of Steel said that PLI Scheme 1.2 builds on the outcomes of the earlier phases of the programme. Under PLI Scheme 1.0, launched in July 2021, companies committed investments of INR 271.06 billion, with planned capacity addition of 7.9 million tonnes and generation of 14,760 direct jobs. PLI Scheme 1.1, launched on 06 January 2025, is expected to attract investments of about INR 170 billion, add 6.4 million tonnes of capacity and generate around 16,000 jobs.
Across the earlier phases, total committed investment stands at INR 438.74 billion, according to the Ministry. Incentives amounting to INR 2.36 billion have been disbursed to participating companies so far under the specialty steel PLI programme.
Sandeep Poundrik, Secretary in the Ministry of Steel, said timely investment, commissioning and sustained production by participating companies would be critical for the success of the scheme, adding that the Ministry would provide facilitation support to ensure smooth implementation.
The Ministry of Steel oversees policy and regulatory matters related to iron and steel production in India, including initiatives aimed at promoting downstream manufacturing, capacity expansion and technology upgradation in the sector.
