India: PLI 1.2 gathers pace with INR 11,887 crore specialty steel investment push

• 85 projects under third round of PLI for specialty steel
  
  
• Stainless steel majors align expansion with policy incentives
  
  

Indias Ministry of Steel has signed 85 MoUs with 55 companies under the Production-Linked Incentive (PLI) Scheme 1.2 for specialty steel, marking a fresh investment commitment of INR 11,887 crore. The third round of the scheme aims to add 8.7 million tonnes (mnt) of downstream specialty steel capacity, reinforcing Indias strategy to reduce import dependence and deepen value-added steel manufacturing.

The scheme, offering incentives of 4-15% over five years starting FY26, spans 22 sub-categories across strategic steel grades, commercial grades, and coated and wire products. So far, INR 236 crore has been disbursed under earlier rounds. Under PLI 1.0 and 1.1 combined, over INR 44,000 crore of investment and more than 14 mnt of incremental capacity have already been committed.

Jindal Stainless expands portfolio

Jindal Stainless signed an MoU under PLI 1.2 to augment specialty and stainless steel capacity, focusing on high-performance alloys and forged products catering to railways, defence, aerospace, and electrical equipment. The move aligns with Indias broader localisation push in critical grades where imports remain significant.

Market participants note that demand for specialty stainless grades is expected to rise steadily, supported by infrastructure expansion, renewable energy projects, and mobility transitions. The companys participation strengthens its positioning in strategic segments with higher realisations and tighter quality specifications.

Other players commit fresh investments

Sambhv Steel Tubes committed INR 361.75 crore across two projects, including thin precision gauge stainless steel sheets and alloy steel rolled long products. Viraj Profiles announced a INR 280 crore investment to enhance value-added stainless capabilities. Avtar Steel also joined the scheme, reaffirming focus on downstream specialty steel manufacturing.

Industry sources suggest that the PLI-led expansion could gradually ease reliance on imported specialty grades, particularly in the 200 and 300 stainless series and select alloy products.

Outlook

The PLI 1.2 scheme is expected to accelerate capacity additions through FY31, supporting higher domestic availability of specialty steel. However, timely commissioning, technology upgradation, and sustained demand from strategic sectors will remain key to achieving targeted outcomes.