Steel Ministry Signs ₹11,887 Crore MoUs Under Third Tranche of PLI for Speciality Steel
Steel Ministry Signs ₹11,887 Crore MoUs Under Third Tranche of PLI for Speciality Steel
India’s Ministry of Steel has signed Memorandums of Understanding (MoUs) worth ₹11,887 crore with 55 companies under the third tranche (PLI 1.2) of the Production Linked Incentive (PLI) Scheme for Speciality Steel. These agreements, signed for 85 approved projects, represent a major step forward for India's initiative to enhance domestic manufacturing capacity for high-value grades of steel that rely on imports.
The announcement of these agreements in February 2026 represents the third round of agreements to date and expands the ecosystem for speciality steel in India, advancing India's goal of being self-reliant (Atmanirbhar Bharat).
Understanding the PLI Scheme for Speciality Steel
The Production Linked Incentive Scheme for Speciality Steel was originally approved in July 2021 with the objective of:
- Minimise dependence on imports of high-quality steel.
- Stimulate advanced production of steel in India.
- Encourage capital investment and upgrades to technology.
- Maximise the domestic value of steel products.
Under the scheme, companies receive 4% to 15% incentives on incremental sales of eligible speciality steel products over a defined base year. The incentive structure ensures that benefits are linked to actual production and sales performance rather than just announced capacity.
The scheme covers 22 speciality steel sub-categories across five major segments:
- Strategic steel grades
- Electrical steel
- Alloy and stainless steel
- Coated steel products
- Wire and special long products
What Products Are Covered Under PLI 1.2?
PLI 1.2 targets 22 speciality steel categories, including:
Strategic & High-Performance Steels
- Super alloys (jet engines, turbines)
- Titanium alloys (aerospace structures, defence armour)
- Alloy and stainless steel flat and long products
- Forged speciality steels
Electrical Steels
- CRGO (Cold Rolled Grain Oriented) steel
- CRNO steel
- Amorphous steel
Coated & Corrosion-Resistant Products
- Electrolytic zinc-nickel coated steel
- Zinc-aluminium coated wire
- Electrolytic chromium coated steel (ECCS)
- Vinyl and nickel coated steels
Wire & Precision Products
- Tyre bead wire
- Spring wire
- Stainless steel precision wire
- High-strength alloy wire rods
These grades are critical for transformers, renewable energy installations, EV motors, defence platforms, industrial machinery, and advanced automotive components.
Achievements of the PLI Speciality Steel Scheme So Far
The scheme has already delivered measurable structural outcomes:
1. Large Investment Mobilization
- Cumulative commitments across tranches exceed ₹50,000 crore (including fresh ₹11,887 crore under PLI 1.2).
- Significant capital expenditure underway across multiple states.
2. Capacity Creation
- Total targeted specialty steel capacity addition across rounds exceeds 20 million tonnes.
- PLI 1.2 alone adds 8.7 million tonnes of advanced steel capacity.
3. Employment Generation
- Over 13,000 direct jobs created under earlier rounds.
- Total employment impact projected to exceed 30,000 direct jobs and multiple times indirect jobs.
4. Import Substitution: India imports between 50-90% of specialty grades of steel such as CRGO, super alloys, and titanium-based materials. The PLI scheme aims to fill this gap by promoting domestic capabilities in melting, rolling , coating, and finishing.
5. MSME Integration: There will be significant increases to MSME participation in the third tranche, particularly with respect to coated products and wire products, which will extend integration through the value chain.
How PLI 1.2 Differs from Earlier Tranches
Parameter | PLI 1.0 | PLI 1.1 | PLI 1.2 |
Policy Focus | Broad specialty steel | Expanded coverage | Strategic & high-end grades |
Projects Approved | ~40+ | ~50+ | 85 |
Companies | Large players dominated | Expanded base | 55 companies, strong MSME presence |
Investment | ~₹27,000+ crore | Part of ₹43,000+ crore cumulative | ₹11,887 crore |
Capacity Target | ~7–8 MT | Production ramp-up | 8.7 MT |
Incentive Range | Up to 12% | Up to 12% | Up to 15% |
Strategic Defence Grades | Limited | Moderate | Core focus |
The third tranche emphasizes technological depth, higher realization per tonne, and industrial sovereignty rather than sheer volume expansion.
Why This Announcement Matters
The ₹11,887 crore MoUs signed under PLI 1.2 are not just more investment announcements but rather a fundamental change in India's manufacturing strategy. The agreement will encourage the development of advanced metallurgy; build the defence/aerospace supply chain; reduce outflow of foreign currency; improve competitive advantage for Indian OEM and EPC companies; and ultimately, there will be a shift from commodity production of steel, toward producing value added specialty metals. As renewable energy capacity continues to grow and the indigenisation of defence continues, the production of specialty steel in India is essential to having a manufacturing base for many other industries.
Conclusion
This third tranche of PLI scheme for speciality steels is an important milestone in India’s steel sector policy evolution. PLI 1.2 will enable India to realise its vision of becoming a global hub for advanced steel manufacturing, and there is ₹11,887 crores invested into 85 projects across the country.
While prior tranches of the PLI scheme provided a foundation for increasing capacity; the current tranche develops technology capabilities, increases import substitution from the domestic steel market, and incorporates MSMEs further into high-value supply chains.
As execution progresses toward FY31, the speciality steel PLI scheme is poised to redefine India’s position in the global steel value chain — not just as a volume producer, but as a producer of advanced, strategic, and high-performance steel.
Frequently asked questions
