India Opens Application Round for Specialty Steel Incentives
India’s PLI for Specialy Steel application round open through January 31st, 2025
India's Production Linked Incentive (PLI) Scheme for Specialty Steel, known as PLI Scheme 1.1, has recently undergone updates to make it more appealing for investors. With a substantial budget allocation of approximately INR 63.22 billion (US$737.45 million), the revised scheme introduces several investor-friendly modifications.
Key changes to the scheme include:
Lower Investment and Capacity Requirements: For Cold-Rolled Grain-Oriented Steel (CRGO), a critical material used in power transformers, the minimum investment has been reduced to ₹3,000 crore, with capacity creation targets set at 50,000 tonnes. This move aims to make India self-reliant on this high-value steel, which is currently imported.
Carry Forward of Excess Production: Companies producing more than their annual target can now carry forward the excess to the next year. This ensures they still qualify for incentives, even if they face production challenges in subsequent years.
Support for Upgrading Existing Facilities: Businesses investing in upgrading their current facilities can now participate with 50% of the required investment threshold.
These updates aim to encourage greater participation and investment in the specialty steel sector, fostering growth and innovation.
SNAPSHOT
India Launches a New Steel PLI Scheme 1.1 to strengthen domestic production.
The objective of the scheme is to promote self-sufficiency in specialty steel production in India, reduce imports and ensure employment generation.
The updated scheme focuses on crucial steel product categories used in sectors like infrastructure, renewable energy, and automobiles.
The revised PLI 1.1 scheme lowers the investment threshold.
Applications from steel companies seeking incentives under the new PLI scheme opened on January 6, 2025, with the deadline set for January 31, 2025.
EVALUATION CRITERIA
Product Categories: The scheme covers five product categories: Coated/Plated Steel Products, High Strength/Wear-Resistant Steel, Specialty Rails, Alloy Steel Products & Steel Wires, and Electrical Steel.
Investment Thresholds: Firms must meet specific investment thresholds for each product category.
End-to-End Production: The input material must be melted or poured in India to ensure end-to-end production within the country.
Capacity Creation: Firms must commit to creating additional production capacity.
Companies who have projects running under PLI 1.0, will not be applicable to apply for the next round
POTENTIAL VALUE
Under the PLI Scheme 1.1 for specialty steel, the incentives are calculated based on the incremental production achieved over the base year. The minimum and maximum incentives a firm can receive depend on their production levels and the specific product category they are manufacturing.
The total budget for the scheme is INR 63.22 billion (US$737.45 million), and it will be distributed among the participating firms based on their performance.
CONNECT WITH THE HICKEY’S INCENTIVES TEAM
The Hickey & Associates incentives team has advised companies navigating the dynamic incentives landscape across India. Contact us for more specifics, including eligibility criteria, application details, and funding requirements. If you’d like our support throughout the application process, we are here to help!