Govt launches third round of PLI scheme for speciality steel sector

New Delhi: The government on Tuesday launched the third round of Production Linked Incentive (PLI) Scheme for speciality steel to attract investment in the sector, as part of its objective to boost domestic output and reduce imports.

Union Steel Minister H D Kumaraswamy launched the third round of the PLI scheme named ‘PLI 1.2’ for speciality steel at a function held here, buoyed by the investment commitment of around Rs 44,000 crore in the first two rounds.

He informed that the PLI scheme for speciality steel was approved by the Union Cabinet in July 2021 to encourage production of high-value, high-grade steels used in sectors such as defence, aerospace, energy, automobiles, and infrastructure.

The scheme with a total outlay of Rs 6,322 crore aims to add about 26 million tonnes of speciality steel capacity over the next few years.

“So far, the PLI scheme has attracted investment commitments worth Rs 43,874 crore...and is expected to add 14.3 million tonnes of new specialty steel capacity in India,” Kumaraswamy said.

According to the latest data, as of September 2025, companies participating in the first two rounds have already invested Rs 22,973 crore and generated 13,284 jobs.

“The response to the first two rounds has been highly encouraging. The success demonstrates the strength of India’s reform-oriented and industry-driven policy framework,” the minister said.

Kumaraswamy said the ‘PLI 1.2’ is designed to accelerate India’s journey towards becoming a global hub for high-grade steel production.

“It will attract new investments in emerging and advanced categories such as super alloys, CRGO steel, stainless steel long and flat products, titanium alloys, and coated steels, materials that are essential for next-generation industrial and defence applications,” he added.

The third round will also open up new avenues for both existing and new players, including MSMEs, who have expanded or upgraded their investment plans after the earlier rounds.

“Through this initiative, we aim not just to produce steel for India, but to supply the world from India,” the minister noted.

When asked about the expected investment in the third round, Steel Secretary Sandeep Poundrik said it would be known over the next few months.

He said there have been some relaxations in the current third round of this scheme to encourage investors.

The PLI scheme incentivises incremental production and investment in identified product categories, thereby enhancing value addition within the country and reducing import dependence in critical sectors, such as defence, power, aerospace and infrastructure.

The scheme covers 22 product sub-categories, including super alloys, CRGO, alloy forgings, stainless steel (long and flat), titanium alloys, and coated steels.

Incentive rates range from 4 per cent to 15 per cent, applicable for five years starting 2025-26, with disbursal beginning in the next fiscal. The base year for pricing has also been updated to 2024-25 to better reflect current trends.

As per government data, the first round of PLI attracted investment commitment of Rs 27,106 crore. Out of this, Rs 22,343 crore has already been invested till September this year. The second round of PLI 1.1 received a commitment of Rs 17,000 crore, of which Rs 630 crore has been invested till September 2025.