AI SummaryPM SETU Component II turns five National Skill Training Institutes (NSTIs) into premier National Centres of Excellence for Skilling. The Ministry of Skill Development and Entrepreneurship (MSDE) runs this part of the PM SETU scheme to improve campus infrastructure, bring in modern trades, build trainer skills and create strong industry ties.
Cabinet approved the five sector-specific National Centres of Excellence under Budget 2025-26 on 7 May 2025. Lead Industry Partners are now being selected through the Expression of Interest and Request for Proposal route, with global MoUs already signed at some institutes.
PM SETU Component II: Capacity Augmentation of Five NSTIs and National Centres of Excellence for Skilling
PM SETU (Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs) is a Centrally Sponsored Scheme looking to upgrade the whole ITI and NSTI ecosystem with industry-led management, modern infrastructure and better training. Component II focuses on five NSTIs located at Bhubaneswar, Chennai, Hyderabad, Kanpur and Ludhiana.
The Directorate General of Training (DGT) under MSDE runs the scheme. It targets new modern labs, better hostels, new trades and a trained pool of instructors. The goal is to train 50,000 instructors and offer everything from certificate courses up to Advanced Diploma programmes.
The total PM SETU outlay stands at ₹60,000 crore over five years, from FY 2025-26 to FY 2029-30. Of this, the Central share is ₹30,000 crore, the State share is ₹20,000 crore and the industry share is ₹10,000 crore. Component II itself carries a dedicated outlay of ₹1,500 crore.
Key Information
| Scheme Name | PM SETU Component II: Capacity Augmentation of Five National Skill Training Institutes |
|---|---|
| Nodal Ministry | Ministry of Skill Development and Entrepreneurship (MSDE) |
| Implementation | Directorate General of Training (DGT) |
| Target NSTIs | Bhubaneswar, Chennai, Hyderabad, Kanpur, Ludhiana |
| Total PM SETU Outlay | ₹60,000 crore (Central ₹30,000 crore, State ₹20,000 crore, Industry ₹10,000 crore) |
| Component II Outlay | ₹1,500 crore |
| Scheme Validity | FY 2025-26 to FY 2029-30 |
| Status | Running; industry partners being selected in 2026 |
Benefits
PM SETU Component II puts substantial money and scope behind the five selected NSTIs. The main benefits are:
- Upgradation of physical and digital infrastructure with a budget of ₹1,000 crore, about ₹200 crore per NSTI.
- Operational and workforce development funding of ₹100 crore to run the institutes smoothly.
- Dedicated Training of Trainers (ToT) allocation of ₹400 crore for technical and teaching skill improvement.
- Introduction of 20 new long-term trades and 10 short-term trades.
- Creation of specialised units such as the Centre for Industrial Collaboration, National Centre of Excellence for Skilling, Centre for TVET Practitioners, and Centre for Research, Innovation and Entrepreneurship.
- CSR tax exemptions for industry partners who contribute to the scheme.
- Autonomy for NSTIs to raise their own revenue through incubation and production centres.
- Modernised residential facilities and hostels for students.
Eligibility
For Lead Industry Partners
- Individual industry entities or members of a consortium can apply.
- Minimum annual turnover of ₹500 crore is needed.
- Minimum employee strength of 500 is required.
- Bidder must commit a minimum contribution of ₹40 crore per NSTI over five years.
- Chairperson of the Institute Management Committee must be a senior leader from the partner organisation.
For Trainees
Students must hold at least a Class 10 pass, though this changes by course. The scheme is open to students, working professionals, graduates and postgraduates. Each of the CTS, CITS and advanced diploma programmes follows its own entry rules, so trainees should check the course guidelines of the concerned NSTI.
Application Process
Industry partners interested in leading an NSTI must go through a selection process run by the DGT.
STEP 1 - Keep a close watch on the official PM SETU portal at pm-setu.skillindiadigital.gov.in and the DGT website at dgt.gov.in for the Expression of Interest (EoI) and Request for Proposal (RFP) notices.
STEP 2 - Submit an initial proposal as per the EoI guidelines along with the required financial and technical documents.
STEP 3 - Respond to the detailed Request for Proposal that follows, which is evaluated through the Quality and Cost Based Selection (QCBS) method.
STEP 4 - The bids are reviewed by a committee that checks technical skill and financial commitment.
STEP 5 - Final selection is cleared by the National Steering Committee (NSC), after which the partner signs a formal agreement and forms an Institute Management Committee (IMC) to run the NSTI.
Trainees apply directly through the admission portals of the respective NSTIs once the course notifications are released.
Documents
- For Industry Partners: Proof of turnover (₹500 crore and above), employee strength certificate, financial commitment letter, Strategic Investment Plan, technical proposal and consortium agreements where applicable.
- For Trainees: Mark sheets of the qualifying exam (Class 8, 10, 12 or degree), identity and address proof, and passport-size photographs.
Latest Position in 2026
Work on Component II is moving ahead. An MoU has been signed with Singapore for the National Centre of Excellence at NSTI Chennai in the advanced manufacturing sector. A proposed NCoE for Aeronautics and Allied Sectors at NSTI Kanpur is being shaped with Indo-French bilateral support and industry help.
An industry consultation was held at NSTI Kanpur on 8 May 2026, with over 25 organisations from defence aerospace, civil aviation, precision engineering and advanced manufacturing taking part. RFPs for selecting Lead Industry Partners have been published in 2026, with deadlines through September 2026.
References
- Official MSDE Website
- Official PM SETU Portal
- PIB Release on Approval of Five National Centres of Excellence
- PIB Release on Industry Consultation at NSTI Kanpur
FAQ's
Which institutes are covered?
The scheme covers five NSTIs at Bhubaneswar, Chennai, Hyderabad, Kanpur and Ludhiana.
How is the funding shared?
The Central government provides ₹30,000 crore, States provide ₹20,000 crore and industry provides ₹10,000 crore out of the total ₹60,000 crore for the full PM SETU scheme.
Is the scheme still running?
Yes. Industry partners are being selected in 2026 through the EoI and RFP route, and global MoUs have been signed, including a partnership with Singapore for the NSTI Chennai centre.
Can industry contributions be used for CSR?
Yes. Contributions made by industry partners to the scheme are eligible for CSR exemptions.
What is the outcome expected for instructors?
The scheme targets training 50,000 instructors in modern technical and teaching skills through its Training of Trainers provision.