India Boosts Steel Industry with New PLI Agreements
In a landmark move to strengthen India’s manufacturing prowess, the Ministry of Steel has signed Memoranda of Understanding (MoUs) for 85 projects from 55 companies under the Production-Linked Incentive (PLI) Scheme 1.2 for Specialty Steel. This significant event took place on February 9, 2026, at Vigyan Bhawan in New Delhi, graced by the presence of Shri H.D. Kumaraswamy, Minister of Steel and Heavy Industries, along with key officials from the Ministry.
The new round of the PLI scheme, which is designed to promote local manufacturing and boost global competitiveness, has attracted a remarkable investment of ₹11,887 crore with a target capacity of 8.7 million tonnes focused on downstream steel and alloy production. Minister Kumaraswamy commended the participating companies for their commitment, emphasizing that this investment will significantly enhance India’s capabilities in specialty steel manufacturing.
Driving Domestic Manufacturing
The PLI Scheme is viewed as a vital reform initiative by the Government of India, aimed at reducing import dependency and conserving foreign exchange. Kumaraswamy pointed out that while India has already made substantial progress in the specialty and alloy steel sectors, these new investments are crucial for the nation to position itself as a dependable supplier of high-value steel globally.
Support for Industry Growth
Shri Sandeep Poundrik, Secretary of the Ministry of Steel, stressed the importance of timely investments and sustained production from the companies involved. He assured them of the Ministry’s continued support to foster success within the scheme.
Evolution of the PLI Scheme
Initiated in July 2021, the Production-Linked Incentive Scheme for Specialty Steel encourages capital investments and facilitates technological advancements in the downstream steel segment. The earlier phase of the scheme, PLI 1.0, promised ₹27,106 crore in investments, created 14,760 direct jobs, and aimed at an output capacity of 7.9 million tonnes. Following that, PLI 1.1, launched on January 6, 2025, is anticipated to draw approximately ₹17,000 crore in investments, potentially generating around 16,000 jobs and an additional production capacity of 6.4 million tonnes.
Incentives and Future Projections
Thus far, an incentive of ₹236 crore has been disbursed to participating companies in this ongoing scheme. The recently launched PLI 1.2, which took effect on November 4, 2025, encompasses 22 product sub-categories across four main categories: Steel Grades for Strategic Sector, Commercial Grades – Category 1, Commercial Grades – Category 2, and Coated & Wire Products. The incentivization rates range from 4% to 15% over a period of five years, starting from FY 2025-26, with disbursements commencing in FY 2026-27.
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