PLI Scheme for Specialty Steel
Background and Purpose
Steel is the backbone of industrial growth. But within steel, there is something called Specialty Steel—a higher-grade, value-added version of steel.
- Normal steel becomes specialty steel when it is further processed by coating, plating, heat treatment, or alloying.
- Specialty steel is crucial for industries like automobile, aerospace, power, defense, and high-end construction.
👉 The problem is: India imports a lot of specialty steel, leading to an annual foreign exchange outgo of around ₹30,000 crore.
So, the government launched the PLI Scheme for Specialty Steel with the purpose:
- To bring in investment,
- To increase domestic capacity, and
- To make India self-reliant in producing these advanced grades of steel.
Quick Facts of the Scheme
- Type: Central Sector Scheme (fully funded by Union Government).
- Implementation Period: FY 2025–26 to FY 2029–30 (5 years).
- Monitoring Agency: Empowered Group of Secretaries (EGoS), headed by Cabinet Secretary.
- Exclusion: Private DISCOM-like exclusions don’t apply here; but only companies registered in India under the Companies Act, 2013 are eligible (including Joint Ventures).
Objective
The main objective is to promote manufacturing of specialty steel grades within India and help the Indian steel sector:
- Mature in technology, and
- Move up the value chain (i.e., not just producing raw steel, but higher-grade, advanced steel).
Product Coverage
The scheme covers five categories of specialty steel:
- Coated/Plated steel products
- High-strength / wear-resistant steel
- Specialty rails
- Alloy steel products and steel wires
- Electrical steel (for transformers, motors, etc.)
Salient Features
(A) Goal
- All basic steel must be “melted and poured” within India.
- This ensures that the entire value chain remains domestic—from raw steel to specialty steel.
(B) Selection of Companies
- Done through a transparent selection process.
- Preference given to companies that commit to front-load their investment (i.e., invest heavily in the initial years).
(C) Financial Incentive
- Incentive divided into 3 slabs:
- Minimum 4% incentive
- Maximum 12% incentive (for electrical steel, CRGO).
- Companies must invest at least the minimum investment amount specified in guidelines.
(D) Fund Limitation
- The scheme is fund limited, meaning total incentives are capped at the Cabinet-approved amount.
- Annual incentive cap: ₹200 crore per eligible company (including JVs).
Importance of Specialty Steel
- Specialty steel is a value-added alloy of normal steel, made through advanced processes.
- It is critical for strategic sectors:
- Defence, aerospace, power, automobiles, infrastructure.
- Reduces dependency on imports and saves foreign exchange.
Expected Outcomes
- India will become self-reliant in high-end steel manufacturing.
- Will reduce imports worth ₹30,000 crore annually.
- Encourage technology upgradation in Indian steel plants.
- Help Indian companies compete in the global market for advanced steel products.
✅ In summary:
The PLI Scheme for Specialty Steel is not just about increasing production but about moving Indian steel from being a raw-material supplier to becoming a high-value, technology-driven steel producer. It is part of India’s Atmanirbhar Bharat vision, reducing import dependency and creating global competitiveness in the steel sector.