Production Linked Incentive (PLI) Scheme (PLI 1.2) for Specialty Steel

Production Linked Incentive (PLI) Scheme 1.2 for Specialty Steel supports domestic manufacturers who want to build high-value steel products in India. Ministry of Steel launched this third round of the scheme on 04 November 2025 and signed MoUs with 55 companies for 85 projects on 09 February 2026 at Vigyan Bhawan, New Delhi.

Under PLI 1.2, participating companies have committed investment of ₹11,887 crore and a production capacity of 8.7 million tonnes in downstream steel and alloy making. The scheme offers incentive rates from 4% to 15% for five years, with payments starting from FY 2026-27.

Production Linked Incentive (PLI) Scheme (PLI 1.2) for Specialty Steel - Introduction

The Production Linked Incentive (PLI) Specialty Steel Scheme, run by the Ministry of Steel, Government of India, supports the domestic production of specialty steel. It gives financial incentives based on the incremental sales of notified specialty steel products.

The scheme covers 22 product sub-categories under four product categories: Steel Grades for Strategic Sector, Commercial Grades Category 1, Commercial Grades Category 2, and Coated and Wire Products. These include super alloys, CRGO, stainless steel long and flat products, titanium alloys, and coated steels.

Eligibility depends on incremental investment and sales growth compared with a set baseline. A Project Management Agency and an Empowered Committee look after applications, project approvals, and payments.

Key Information

Benefits

This scheme offers several advantages to registered manufacturers:

• Financial incentives on incremental sales of manufactured specialty steel, at rates between 4% and 15%.
• Encouragement for investments in plant, machinery, and advanced technology that raise domestic value addition.
• Promotion of domestic value addition in steel production, helping reduce import dependence on critical grades.
• Support for large-scale employment generation across the downstream steel sector.
• Advancement of high-tech steel manufacturing capabilities in segments used by automobiles, railways, defence, electrical equipment, and aerospace.

Eligibility

Applicants must meet the following criteria:

• Must be a company registered in India under the Companies Act, 2013, with end-to-end domestic manufacturing (melting and pouring) of specialty steel.
• A maximum of 20% of total value addition may occur via third parties, though only the manufacturer of the final product can claim the incentive.
• The company's net worth (including group companies) must be at least 30% of the total committed investment, based on the previous year's audited financial statements.
• For companies incorporated after 31 March 2025, net worth must reach 30% of the committed investment before submission.
• Applicants must satisfy minimum threshold requirements for incremental production, capacity, and investment.
• Companies may only use the investment for one PLI scheme at a time; claiming incentives under multiple programs for the same investment is prohibited.
• Projects previously incentivized under earlier rounds of the Specialty Steel PLI scheme are ineligible.

Application Process

Online Registration Process

Applicants must follow these steps to register on the official PLI portal:

STEP 1 - Visit the official PLI portal for Specialty Steel and open the online registration page.

STEP 2 - Enter company details like the Corporate Identification Number (CIN) and date of incorporation.

STEP 3 - Provide contact information for the authorized representative.

STEP 4 - Create a secure password for the account.

STEP 5 - Submit the form using the provided captcha.

STEP 6 - Receive a unique registration linked to the CIN.

STEP 7 - Log in with official credentials to complete the application process.

Note Points

Applications must be submitted within 30 days of the scheme launch. The applicant must not be a wilful defaulter, under insolvency proceedings (NCLT), or classified as an NPA. All applications require authorization from the Board of Directors or Managing Director. Financial Year 2024-25 serves as the base year for all calculations, and incentives run for five years starting from FY 2025-26. Eligible investment is capped at 80% of the total committed investment.

Documents

Applicants must prepare the following documents:

• Certificate of Incorporation (Companies Act, 2013).
• CIN details of the applicant firm.
• Audited financial statements for the preceding financial year.
• Net worth certificate (including group entities).
• Board Resolution and authorization letter for the signatory.
• Detailed Project Report (DPR).
• End-user certificate.
• Product sub-category details (Annexure I).
• Declaration confirming non-NPA status and absence of insolvency proceedings.

References

• Ministry of Steel signs MoUs for 85 Specialty Steel projects (PIB)
• H.D. Kumaraswamy launches PLI 1.2 for Specialty Steel (PIB)
• PLI 1.2 Scheme Guidelines Booklet (PDF)

FAQ's

What is the objective of the PLI Scheme 1.2?

The scheme aims to boost the domestic manufacture of high-value specialty steel by providing financial incentives linked to incremental production and investment.

Who qualifies to apply?

Companies registered under the Companies Act, 2013, that manufacture specialized steel products are eligible to apply.

When was PLI 1.2 launched?

The third round of the scheme was launched on 04 November 2025, and MoUs with 55 companies for 85 projects were signed on 09 February 2026.

What is the purpose of the 2024-25 base year?

The base year is the benchmark used to measure incremental production and performance improvements for calculating incentive amounts.

Are NPA-classified companies eligible?

No, companies listed as Non-Performing Assets (NPA), wilful defaulters, or involved in financial fraud are ineligible for this scheme.

Can third-party manufacturing be utilized?

Yes, up to 20% of value addition is permitted through third parties, provided the main applicant produces the final, eligible end product.