The Production-Linked Incentive (PLI) Scheme 1.1 for the steel sector is expected to attract investments worth ₹40,000-45,000 crore. This initiative aims to boost domestic production of speciality steel and reduce reliance on imports.
The government is set to launch a new round of the PLI scheme for the steel sector. This is introduced by the Union Minister of Steel and Heavy Industries, H D Kumaraswamy, on January 6. This was announced in a statement from the steel ministry.
The PLI scheme aims to encourage domestic production of specialty steel and reduce dependency on imports by attracting capital investments. This is a part of the government’s broader strategy to strengthen local manufacturing capabilities.
Earlier, the government had launched the PLI scheme for specialty steel, which attracted investments worth ₹27,106 crores. The scheme foresees creating 14,760 direct employment opportunities and is expected to lead to the production of 7.90 million tonnes of specialty steel. Of this, investments of ₹18,300 crore have materialized, generating over 8,660 jobs so far.
The government has been in regular contact with companies participating in the scheme. Based on their feedback, it was observed that there is potential to reintroduce the scheme to increase participation. This new version of the PLI scheme is expected to address gaps from the first phase and create more opportunities for manufacturers.
The concept of the PLI scheme emerged during the global lockdowns in 2020 caused by the Covid-19 pandemic. It was designed to boost domestic manufacturing and reduce reliance on imports. Initially, the scheme was introduced for three sectors and was later extended to include the steel sector in November 2020.
The government had earlier acknowledged that the response to the initial round of the PLI scheme for speciality steel was below expectations. Despite the initial effort, speciality steel remains an area requiring further attention to achieve the desired outcomes.
Speciality steel is a high-grade material used in critical sectors such as defence, automobiles, and electrical industries. By supporting its domestic production, the government aims to meet demand locally and promote self-reliance in these industries.
The initiative will likely invite fresh investments and provide more employment opportunities while addressing previous challenges faced by manufacturers.