Production Linked Incentive (PLI) Scheme for Specialty Steel

What is the PLI Scheme for Specialty Steel?

The Production Linked Incentive (PLI) Scheme for Specialty Steel is a central sector scheme of the Ministry of Steel. According to the Ministry, the scheme was notified on 29 July 2021 with a budgetary outlay of Rs 6,322 crore, and detailed guidelines followed on 20 October 2021. The scheme rewards incremental production of specialty steel over a five-year period. The Ministry of Steel has since run three application rounds, the original 2021 round, PLI 1.1 launched on 6 January 2025, and PLI 1.2 whose MoUs were signed on 9 February 2026; each opened to bring in more manufacturers and unused budget headroom.

The PLI Scheme for Specialty Steel targets value-added steel, the grades used in defence, space, power, automobiles and high-end capital goods, that India has historically imported. The scheme rewards companies that make these grades domestically, with the entire process from melting to finishing carried out in India. Specialty steel is the finished, value-added grade produced after normal finished steel is put through further processes such as coating, plating, heat treatment or alloying, which is why import substitution here saves foreign exchange on the highest-margin end of the steel chain.

Main objectives

• Promote domestic manufacturing of high-grade specialty steel.
• Reduce India's dependence on imports of value-added steel.
• Attract fresh investment and build capacity for specialty steel.
• Generate direct and indirect employment across the steel value chain.

What does the PLI Scheme for Specialty Steel cover?

The scheme covers five categories of specialty steel, per the Ministry of Steel:

Within these five categories the scheme originally recognised 19 sub-categories; the third round, PLI 1.2, widened the coverage to 22 sub-categories, adding grades such as super alloys, titanium alloys, alloy forgings and additional stainless-steel and coated products. A key condition across every round is the "melt and pour" requirement: the specialty steel must be melted and poured within India, ensuring the whole manufacturing chain is domestic.

How much does the PLI Scheme for Specialty Steel provide?

The scheme pays selected companies an incentive on incremental sales over a base year, per the Ministry of Steel guidelines. The original guidelines set the incentive range at 4% to 12% across categories and sub-categories, paid over five years. For the third round, PLI 1.2, the Ministry of Steel revised the range to 4% to 15%, applicable for five years starting FY 2025-26, with disbursal beginning in FY 2026-27. The exact rate depends on the specialty steel category and the production year, and every payment is subject to the company meeting minimum investment and incremental-sales thresholds.

The base year against which "incremental" sales are measured has also moved. The first round used 2019-20 as the base; the later rounds reset the base year to 2024-25, so that a company entering under PLI 1.2 earns incentives only on sales above its most recent performance rather than a pre-pandemic figure.

What are the three rounds. The original, PLI 1.1 and PLI 1.2?

The Ministry of Steel opened the scheme in three phases because several first-round signatories exited and left committed budget unused.

• Original round (2021): notified on 29 July 2021 with guidelines on 20 October 2021. Companies signed MoUs across the five categories and 19 sub-categories at incentive rates of 4% to 12%.
• PLI 1.1 (second round), launched on 6 January 2025 to widen participation. According to the Ministry of Steel, 42 MoUs were signed with 25 companies at a formal event in New Delhi on 24 March 2025, with this round expected to draw around Rs 17,000 crore of investment, add roughly 6.4 million tonnes of capacity and generate about 16,000 jobs.
• PLI 1.2 (third round) — MoUs for 85 projects across 55 companies were signed on 9 February 2026. Participating companies committed Rs 11,887 crore of investment and 8.7 million tonnes of downstream steel and alloy-making capacity, at incentive rates of 4% to 15%.

Across the rounds, the Ministry of Steel reports the scheme has drawn committed investment of about Rs 43,874 crore, of which roughly Rs 22,973 crore had already been invested, with more than 13,000 jobs created. Because these figures are revised as projects are implemented, confirm the latest numbers on steel.gov.in before relying on them.

Who is eligible for the PLI Scheme for Specialty Steel?

A company can apply if it:

• Is a company registered in India that manufactures, or commits to manufacture, one or more of the five eligible categories of specialty steel.
• Meets the melt-and-pour in India requirement for its product.
• Commits to the minimum investment and incremental-sales thresholds for its chosen category.

You are not eligible if:

• You are an individual, student or job seeker seeking a personal grant, the PLI Scheme for Specialty Steel is a company incentive scheme with no individual benefit.
• Your product does not fall within one of the five notified categories.
• Your specialty steel is not melted and poured in India, or you cannot meet the investment and sales thresholds.

Anyone offering personal "Specialty Steel PLI registration" to individuals for a fee is running a scam. The scheme has no citizen application.

How to apply for the PLI Scheme for Specialty Steel

The PLI Scheme for Specialty Steel has no citizen application; the process is entirely for companies and was conducted online through the Ministry of Steel:

1. Register your company on the Ministry of Steel PLI portal at steel.gov.in/pli.
2. Identify the specialty steel category and sub-category your product falls under, and confirm you meet the melt-and-pour condition.
3. Prepare the detailed project report, audited financials and proof of manufacturing capability.
4. Submit the online application with the required documents within the notified application window.
5. If selected, execute the agreement and claim incentives against verified incremental sales each year.

Note: the application windows for all three rounds. The first round, PLI 1.1 and the third-round PLI 1.2 to have closed, with the latest MoUs signed on 9 February 2026. Confirm the current status on steel.gov.in before acting on any claim about a reopened window.

What was the original projection for the scheme?

At notification in 2021, the Ministry of Steel projected that the full scheme would attract investment of around Rs 40,000 crore and add roughly 25 million tonnes of specialty steel capacity, with an expected employment impact of about 5.25 lakh people including 68,000 direct jobs. These were the headline projections for the scheme as a whole; the round-by-round MoU figures above are the firmer numbers, being tied to signed commitments rather than launch estimates.

Why does the "melt and pour" condition matter?

The melt-and-pour in India condition is central to the PLI Scheme for Specialty Steel. It requires that the steel be melted and poured domestically, so that the entire value chain, from crude steel to finished specialty grade; happens in India. Without this condition, a company could import semi-finished steel and do only the final finishing step, which would not build genuine domestic capability. The condition is what makes the scheme an import-substitution measure for high-grade steel used in defence, space, power and automobiles.

How does the PLI Scheme for Specialty Steel differ from a subsidy?

The PLI Scheme for Specialty Steel is a performance-linked incentive, not an upfront capital subsidy. Three features set it apart:

• Paid on incremental sales. A company earns 4% to 12% only on the increase in sales of eligible specialty steel over its base year.
• Category-based rates. The rate depends on the specialty steel category and sub-category, steering investment towards higher-value grades.
• Domestic value chain gated. The melt-and-pour condition and minimum investment thresholds must be met for incentives to be paid.

Help and where to verify details

There is no citizen helpline for the PLI Scheme for Specialty Steel because it has no individual application. Companies raise queries through the Ministry of Steel PLI portal. The scheme guidelines, the five categories and sub-categories, and the list of selected companies are published on steel.gov.in and in PIB releases.

Treat any offer of personal "specialty steel PLI registration", any demand for a fee to "add your name", or any request for OTPs or bank details in the scheme's name as a scam. The scheme deals only with registered companies, never with individual beneficiaries.