**Executive Summary**
The Government of India launched Production Linked Incentive (PLI) Scheme 1.2 for Specialty Steel on February 9, 2026, to strengthen high-value manufacturing and reduce import dependence. The launch included the signing of MoUs with participating industry players. The scheme aims to add 8.7 million tonnes of specialty steel capacity by FY 2031.
**Key Points / Main Content**
* **PLI Scheme 1.2 Overview:**
* Aimed at building a resilient and globally competitive specialty steel ecosystem.
* Aligned with the vision of "Make in India" and "Aatmanirbhar Bharat".
* Encourages domestic capacity creation in advanced and strategic steel products.
* **MoUs and Investments:**
* 85 MoUs have been signed with 55 companies.
* Commits investments of ₹11,887 crore.
* **Capacity Expansion:**
* Projects are expected to add 8.7 million tonnes of specialty steel capacity by FY 2031.
* Focuses on high-end steel segments like electrical steel, alloy and stainless steels, coated products, and grades for strategic sectors.
* **Incentives and Objectives:**
* Incentive rates ranging from 4% to 15% over a five-year period.
* Designed to promote investment, technology upgradation, and value addition.
* Aims to integrate Indian manufacturers into global value chains.
* Seeks to address structural gaps by incentivising domestic production, conserving foreign exchange, and positioning India as a reliable global supplier.
* **Call to Action:**
* Participating companies are called upon to implement projects in a time-bound manner.
* Maximise the use of indigenous technologies and inputs.
* Government committed to facilitation and timely resolution of operational issues.
**Impact Analysis**
**Stakeholder: Participating Companies**
* **Impact:** Companies are expected to invest and expand specialty steel capacity.
* **Action Required:** Implement projects in a time-bound manner, maximise the use of indigenous technologies and inputs, and engage with the government for resolution of operational issues.
**Stakeholder: Indian Steel Industry**
* **Impact:** Potential for increased domestic capacity, technological advancement, and integration into global value chains.
* **Action Required:** Stay informed about the scheme, explore participation opportunities, and align with the government's vision for specialty steel manufacturing.
**Stakeholder: Government of India**
* **Impact:** Advances "Make in India" and "Aatmanirbhar Bharat" priorities.
* **Action Required:** Facilitate the implementation of PLI Scheme 1.2 and timely resolve operational issues.
Key Entities Referenced
Production Linked Incentive (PLI) Scheme 1.2 for Specialty Steel: A government scheme designed to incentivize the production of specialty steel in India, aiming to boost domestic manufacturing and reduce import dependence.
Ministry of Steel: The government ministry responsible for the development and regulation of the steel industry in India, and the implementing body for the PLI scheme.
H.D. Kumaraswamy: The Union Minister for Steel and Heavy Industries who launched the PLI Scheme 1.2.
Ministry of Steel
H.D. Kumaraswamy launches PLI 1.2: Major
Push to India’s Specialty Steel Ecosystem
PLI 1.2 Aligns with PM Modi’s Vision of Global Manufacturing
Leadership
Posted On: 09 FEB 2026 6:28PM by PIB Delhi
The Government of India launched Production Linked Incentive (PLI) Scheme 1.2 for Specialty Steel,
marking a significant milestone in the country’s efforts to strengthen high-value manufacturing and reduce
import dependence in critical steel grades. The launch, held at Vigyan Bhawan in New Delhi, also
witnessed the signing of Memoranda of Understanding (MoUs) with participating industry players,
reflecting robust industry confidence in India’s long-term growth prospects.
Addressing the gathering after the MoU signing ceremony, Union Minister for Steel and Heavy Industries
H. D. Kumaraswamy underscored that PLI 1.2 is a decisive step towards building a resilient and globally
competitive specialty steel ecosystem, fully aligned with the vision of Hon’ble Prime Minister Shri
Narendra Modi. The Union Minister noted that the scheme advances the twin national priorities of Make
in India and Aatmanirbhar Bharat by encouraging domestic capacity creation in advanced and strategic
steel products.
Under PLI Scheme 1.2, 85 MoUs have been signed with 55 companies, committing investments of
₹11,887 crore. These projects are expected to add 8.7 million tonnes of specialty steel capacity by FY
2031, significantly expanding India’s capabilities in high-end steel segments such as electrical steel, alloyand stainless steels, coated products, and grades required for strategic sectors.
The third round of the PLI Scheme has been launched in response to strong industry demand and the need
for sustained capacity expansion in specialty steel, which is essential for sectors including automobiles,
railways, defence, electrical equipment, and aerospace. With incentive rates ranging from 4% to 15% over
a five-year period, the scheme is designed to promote investment, technology upgradation, and value
addition while integrating Indian manufacturers into global value chains.
Speaking on the broader impact of the scheme, the Minister highlighted that “PLI 1.2 seeks to address
structural gap by incentivising domestic production, conserving foreign exchange, and positioning India as
a reliable global supplier of advanced steel”.Union Minister added in that “the achievements under earlier rounds of the PLI Scheme further reinforce
the policy’s effectiveness. Across PLI 1.0 and 1.1, committed investments of ₹43,874 crore have already
translated into substantial on-ground progress, including significant capacity creation and employment
generation. PLI 1.2 builds on this momentum, deepening the domestic steel ecosystem and strengthening
the entire value chain”.
Concluding his address, Union Minister H.D. Kumaraswamy called upon participating companies to
implement their projects in a time-bound manner and maximise the use of indigenous technologies and
inputs. He reiterated the Government’s commitment to facilitation and timely resolution of operational
issues, emphasising that the success of PLI 1.2 will play a pivotal role in India’s journey towards
becoming a global hub for specialty steel manufacturing.
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AG
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