PLI 1.2 for Specialty Steel — Incentives From the Ministry of Steel

India's specialty steel producers can earn a performance-linked payout from the central government under the Production Linked Incentive (PLI) Scheme 1.2, administered by the Ministry of Steel. Rather than a flat grant, the support is worked out on the additional output a company produces and sells — the more eligible steel it moves out of the gate, the larger the incentive.

The programme has two clear aims. It wants companies to commit serious money to modern plant, machinery and process technology, and it wants that work done inside India: the guidelines require input material to be melted and poured domestically, and cap how much of the total value addition can be handed to third parties at 20%.

Day-to-day running sits with a Project Management Agency (PMA), while an Empowered Committee gives the final sign-off. Between them they handle registration, scrutiny of proposals, approval of committed investment and production targets, calculation of incentives and the eventual disbursement.

The incentive window runs for a maximum of five years beginning FY 2025-26, and the reference point for deciding what counts as "additional" is FY 2024-25, which the scheme treats as its base year.

• Subsidy-style incentive on incremental sales — no equity stake taken
• Incentives can run for up to five years, starting FY 2025-26
• FY 2024-25 is the base year for measuring incremental output
• Open only to companies registered in India under the Companies Act, 2013
• Net worth must be at least 30% of total committed investment
• Applications pass through PMA screening and Empowered Committee approval

Only a company registered in India under the Companies Act, 2013 can apply — the scheme is not open to other kinds of entities. Beyond that, applicants must clear these tests:

• End-to-end manufacturing in India: the company must make the identified specialty steel grades domestically, with the input material melted and poured within the country.
• Net worth: the company's net worth, counting its group companies, must be at least 30% of the total committed investment, judged on audited financial statements from the immediately preceding financial year. Companies incorporated after 31/03/2025 must show that same 30% cushion before the date of application.
• Minimum thresholds: prescribed limits for incremental production, capacity and investment have to be met.
• Eligible investment only: capital spending must fall within the categories the guidelines treat as eligible to be counted towards the investment calculation.
• Clean record: the applicant cannot be classified as an NPA, a wilful defaulter or a fraud, and must have no insolvency proceedings admitted before the NCLT.
• Not a repeat beneficiary: projects that have received, or expect to receive, incentives from earlier rounds of this same scheme are excluded.
• Third-party limits: no more than 20% of total value addition may be carried out through third parties, and only the company manufacturing the eligible end-product sub-category can claim the incentive.

PLI 1.2 for Specialty Steel — Incentives From the Ministry of Steel is open to startups at any stage. It is open to startups registered anywhere in India.

PLI 1.2 for Specialty Steel — Incentives From the Ministry of Steel accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.

The scheme pays against incremental sales of eligible specialty steel products, so the reward scales with how much extra a company actually sells rather than arriving as a fixed sum. Because the amount varies from project to project, there is no single headline figure — the payout depends on the approved targets and the performance later verified.

The support is a subsidy-style incentive, which makes it non-dilutive: the government takes no equity stake in the company in return.

Beyond the cash, the scheme is designed to pull through capital investment in upgraded plant, machinery and technology, and to keep stages such as melting and pouring inside India. The intended knock-on effects are job creation, stronger domestic capability in advanced steelmaking, reduced reliance on imports and a firmer position for India in the global specialty steel market.

PLI 1.2 for Specialty Steel — Incentives From the Ministry of Steel is offered by Ministry of Steel, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

Step 1 — Screening by the Project Management Agency (PMA). Every application is checked against the eligibility rules: company registration, net worth relative to committed investment, and compliance with the prescribed manufacturing guidelines.

Step 2 — Evaluation against thresholds. The PMA then assesses the proposed investments, planned production capacities and incremental sales targets to see whether they clear the minimum thresholds set out in the scheme.

Step 3 — Review and approval by the Empowered Committee. Acting on the PMA's recommendation, the Empowered Committee takes the final decision on which projects qualify and approves their committed investment and production targets.

Step 4 — Disbursement against verified performance. Incentives are released only after the actual incremental production and sales are verified, across the five-year incentive period.

Before you apply to PLI 1.2 for Specialty Steel — Incentives From the Ministry of Steel, keep the following documents ready:

• A pitch deck or short business plan describing the problem, product and traction
• Company registration documents and PAN
• Founder identification (PAN / Aadhaar) and brief profiles
• Recent financial statements or projections
• Product details — a demo, prototype or working link if available

Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.