Reviving India’s Steel Industry: The Launch of PLI 1.1
In an effort to bolster the domestic production of specialty steel, the Indian government has announced the opening of applications for the new Production Linked Incentive Scheme (PLI) 1.1. This scheme is set against the backdrop of the earlier PLI 1.0, which closed early in 2023 after receiving only ₹2,300 crore in applications against a budget of ₹6,322 crore since its inception in 2021.
What’s New in PLI 1.1?
Steelmakers have until 31 January to apply for incentives under the ₹4,000-crore PLI 1.1 scheme. This initiative aims to enhance the production of specialty steel grades not currently manufactured in India. The launch comes at a time when demand for specialty steel is on the rise, and the government is keen on reducing imports.
Notably, PLI 1.1 introduces a reduced investment threshold for cold rolled grain oriented (CRGO) steel, dropping from ₹5,000 crore to ₹3,000 crore, alongside a decreased capacity limit from 200,000 tonnes to 50,000 tonnes. These changes are expected to attract more applications, as no applications were received under the previous scheme for this specific grade.
Key Features of PLI 1.1
- Encourages new facilities and augmentation of existing ones.
- Production tenure spans from FY 2025-26 to FY 2029-30.
- Sub-categories include coated steel, high-strength steel, and specialty rods.
- 20% value addition by third parties is permitted.
With the Atmanirbhar Bharat initiative in mind, the government aims to strengthen domestic production capabilities while mitigating the outflow of foreign exchange due to imports. In FY21 alone, India imported 4 million tonnes of specialty steel at a cost of about ₹30,000 crore.
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Conclusion
The PLI 1.1 scheme marks a significant step toward enhancing India’s steel production capabilities, promoting self-reliance, and positioning India as a competitive player in the global steel market.
