The Future of Global Metal Supply with PLI Scheme for Speciality Steel

Published on 4 February, 2025

On February 1, 2025, Finance Minister Nirmala Sitharaman presented her eighth consecutive Union Budget, marking a decisive step towards strengthening India’s manufacturing sector. A key highlight of the budget was the significant financial allocation to the Production Linked Incentive (PLI) scheme for speciality steel, underscoring the government's commitment to boosting domestic production, fostering technological innovation, and reducing import dependency. With this robust backing, the Indian steel industry is poised to advance in both quality and capacity, aligning with the vision of Atma Nirbhar Bharat (self-reliant India). This strategic financial endorsement not only reaffirms the confidence of the Government of India in its domestic steel manufacturing capabilities but also signals a transformative shift in the global metal supply chain.

 

⁠Overview of the PLI Scheme for Speciality Steel⁠

 

In 2021, the Government of India launched the PLI scheme for speciality steel with a financial commitment of ₹6,322 crore. The initiative was designed with several core objectives:

 

1. Promotion of Value-Added Manufacturing: Encouraging the production of advanced, high-performance steel grades.

2. Technological Upgradation: Adopting cutting-edge technologies to elevate the manufacturing process.

3. Import Substitution: Reducing the country’s reliance on imported steel by bolstering domestic production.

 

During the recent Union Budget presentation, the Centre allocated additional funds to further this initiative, reinforcing the commitment to develop a self-sustaining and competitive steel industry on the global stage.

 

⁠Recent Steel Manufacturing Developments: PLI Scheme 1.1⁠

 

In January 2025, in response to constructive industry feedback and evolving market dynamics, the Union Minister of Steel and Heavy Industries, HD Kumaraswamy, introduced the second phase of the initiative, PLI Scheme 1.1. This revised scheme aims to expand participation and strengthen the framework of its predecessor. Notable enhancements include:

 

1. Broader Eligibility Criteria: Allowing a wider array of industry participants by relaxing certain restrictions.

2. Increased Domestic Production: Further investments will boost local manufacturing capabilities, assuring a reliable, high-quality steel supply.

3. Focused Product Categories: The scheme supports five critical categories of speciality steel products:
Coated/Plated Steel Products
High Strength/Wear Resistant Steel
Specialty Rails
Alloy Steel Products
Steel Wires and Electrical Steel

 

These product categories have diverse applications across industries such as white goods, transformers, automotive, and other niche sectors, reinforcing this initiative's strategic importance.

 

⁠Technical Insights into Speciality Steel Grades⁠

 

Speciality steel is distinguished by its superior mechanical and chemical properties, which are critical for high-performance applications. Key technical attributes include:

 

1. High Tensile and Yield Strength: Essential for components operating under high stress and pressure.

2. Superior Corrosion Resistance: Vital for maintaining structural integrity in corrosive environments.

3. Tailored Alloy Compositions: Incorporation of elements such as chromium, nickel, and molybdenum to upgrade performance and durability.

 

For instance, austenitic stainless steels like SS 304 and SS 316 are widely used in plumbing and chemical processing industries due to their exceptional corrosion resistance. Similarly, duplex stainless steels are increasingly preferred in offshore and high-pressure applications, offering a balanced combination of strength and corrosion resistance. 

 

Compliance with rigorous international standards ensures that the speciality steel produced under the PLI scheme consistently meets the highest quality benchmarks, thereby providing reliable raw materials for downstream industries. Notably, while the 2024 budget laid a crucial foundation for this growth, the 2025 budget represents a decisive escalation in financial commitment to the speciality steel sector.

 

At Online Fittings, we are committed to facilitating your access to superior speciality steel products that adhere to global standards. Our expertise and strategic sourcing capabilities are designed to support your operations in an increasingly competitive market. Please contact our team for further information or to discuss your specific requirements.