India preparing fresh round of PLI push for steel with sweeping relaxations: HD Kumaraswamy

Union Minister of Steel & Heavy Industries HD Kumaraswamy
| Photo Credit:
MURALI KUMAR K

India is preparing a new set of interventions in its flagship Production-Linked Incentive (PLI) Scheme for Speciality Steel. The proposed relaxations would see a base year shift to FY25 from FY20, protect private investments in the sector, and prioritising brownfield capacity expansion.

The scheme, likely dubbed as PLI 1.2 or PLI 2.0, will ease capex norms and widen coverage to include at least 25 more speciality steel and high-end offerings, Union Minister for Steel, HD Kumaraswamy, told businessline.

Earlier, two rounds of the scheme — PLI 1.0 and the PLI 1.1, the latter in January, had already attracted ₹44,000 crore in committed investments. However, the government is now looking to broaden participation by removing “specific rigidities that industry flagged as barriers”, Kumaraswamy said. Industry suggestions for tweaks have been considered to ensure schemes are MSME-friendly, and there is a greater push for self-reliance.

The Steel Ministry expects that over the next five years, at least ₹4,000 crore in incentives will flow to producers under the current framework. The exact outlay of the upcoming is still under discussion.

Steel PLI had an allotment of ₹6,500 crore, as per initial announcements, with around ₹2,500 crore being used in first two.

Major Reset Proposed

Now, under the planned PLI 1.2, brownfield capacity expansions will get easier entry, as mandatory fresh capacity additions are relaxed. Producers will no longer need to maintain a strict annual incremental production rate.

Incentive claims will be permitted even if output targets fall short of MoU commitments, primarily considering the cyclical nature of the metal markets. 

According to Kumaraswamy, the tweaks are designed to make the scheme more inclusive for smaller players, while there remains scope for integrated producers to come in too.  “This will bridge gaps in critical steel segments such as alloy, coated, and high-grade products,” he said. 

In a parallel development, India’s DGTR in its final findings has recommended safeguard imposition for three years with staggered rates of 12-11 per cent. This comes as the Centre gears up to protect domestic steel from a flood of imports. A 12 per cent safeguard on steel imports came into effect in April for a 200-day period, basis initial recommendations of the trade body.

Published on August 17, 2025