Steel Sector To Get Fresh Round Of PLI Incentives With Relaxed Rules: H.D. Kumaraswamy

New Delhi, Aug 18 (KNN) India is working on a fresh set of interventions under its flagship Production-Linked Incentive (PLI) Scheme for Speciality Steel. 

The proposed changes include shifting the base year to FY25 from FY20, safeguarding private sector investments, and giving preference to brownfield capacity expansion.

The revised scheme—likely to be introduced as PLI 1.2 or PLI 2.0—will also relax capital expenditure requirements and expand its scope to cover at least 25 additional speciality steel and high-end products, Union Steel Minister H.D. Kumaraswamy told businessline.

The initial two phases of the scheme—PLI 1.0 and PLI 1.1, the latter launched in January—have already drawn investment commitments worth Rs 44,000 crore. 

However, the government now aims to expand participation by addressing “specific rigidities that industry flagged as barriers,” Kumaraswamy said. 

He noted that industry recommendations have been factored in to make the scheme more MSME-friendly and to strengthen the drive for self-reliance.

According to the Steel Ministry, producers are expected to receive at least Rs 4,000 crore in incentives over the next five years under the existing framework. 

While the precise outlay for the upcoming version is still being finalised, the Steel PLI had an initial allocation of Rs 6,500 crore, of which around Rs 2,500 crore has already been utilised in the first two phases.

Under the proposed relaxations, producers will no longer be required to adhere to rigid annual incremental production targets. Incentive claims may still be permitted if output falls short of Memorandum of Understanding (MoU) commitments, in recognition of the cyclical nature of the steel market. 

The revised framework will help bridge critical gaps in alloy, coated, and high-grade steel segments, while making participation more inclusive for smaller producers, Kumaraswamy said.

(KNN Bureau)