Ministry of Steel Signs MoUs for 85 Specialty Steel Projects Involving Investment of ₹11,887 Crore

1. At a Glance

• On 9 February 2026, Ministry of Steel signed 85 MoUs with 55 companies under PLI Scheme 1.2 (Third Round) for Specialty Steel at Vigyan Bhawan, New Delhi [1][2].
• Committed investment ₹11,887 crore; committed capacity 8.7 million tonnes of downstream specialty steel/alloy [1][2].
• Relevance: flagship Make in India / Atmanirbhar Bharat instrument for import substitution in high-value steel — a recurring PLI / industrial-policy theme in GS-III.

2. Why in the News

• MoU signing event on 09.02.2026 under PLI 1.2, the Third Round of the Specialty Steel PLI, presided over by Union Minister H.D. Kumaraswamy (Steel & Heavy Industries) [1].
• Builds on the launch of PLI 1.2 on 04 November 2025 [2].

3. Background & Evolution

• 22 July 2021 — Union Cabinet approved the PLI Scheme for Specialty Steel with outlay ₹6,322 crore, projected investment ~₹40,000 crore, capacity addition ~25 MT [3].
• Guidelines notified 2021; first-round applications selected (67 applications) in 2022; 57 MoUs with 27 companies signed earlier [4].
• PLI 1.1 (second round) launched by Min. Kumaraswamy in 2024 to absorb unused capacity [4].
• PLI 1.2 (Third Round) launched 04 Nov 2025; MoUs signed 09 Feb 2026 [2].

4. Core Static Facts

• Implementing Ministry: Ministry of Steel (independent ministry; not under Heavy Industries) [1].
• Scheme outlay (parent): ₹6,322 crore over 5 years [3].
• Original scheme duration: FY 2023-24 to 2027-28; PLI 1.2 incentives run 5 years from FY 2025-26, disbursement from FY 2026-27 [2][3].
• Original product categories (5): Coated/Plated Steel; High-Strength/Wear-resistant Steel; Specialty Rails; Alloy Steel Products & Steel Wires; Electrical Steel (CRGO) [3].
• PLI 1.2 coverage: 22 sub-categories under 4 categories — (i) Strategic Sector Grades, (ii) Commercial Grades-1, (iii) Commercial Grades-2, (iv) Coated & Wire Products [2].
• Incentive slabs: Original 4%–12% (highest for CRGO electrical steel); PLI 1.2 4%–15% [2][3].
• PLI 1.2 commitments: 85 projects, 55 firms, ₹11,887 cr, 8.7 MT capacity by FY 2031 [1][2].

5. Multi-Dimensional Analysis

Economic

• Targets import substitution of high-value alloy/electrical/coated steels currently imported (Japan, Korea, China) [3].
• Combined three rounds: investments approaching ₹40,000 cr target envisaged in 2021 Cabinet note [3].

Strategic / Technological

• "Strategic Sector Grades" category in PLI 1.2 directly serves defence, space, nuclear, EV supply chains [2].
• CRGO electrical steel — critical for transformers/EV motors — gets the highest incentive (15%); India currently lacks domestic CRGO capacity [2][3].

Administrative

• Delivery via MoU mechanism with verified investment thresholds; incentive linked to incremental production over base year [3].
• Sequential rounds (Round-1 → PLI 1.1 → PLI 1.2) to absorb unutilised capacity from earlier rounds [4].

Industrial Policy

• Part of the 14-sector PLI umbrella approved by Cabinet in Nov 2020 (₹1.97 lakh cr) [5].

6. Recent Developments

• 04 Nov 2025: PLI 1.2 launched by Min. Kumaraswamy [2].
• 09 Feb 2026: 85 MoUs signed at Vigyan Bhawan; ₹11,887 cr commitment [1].
• 8.7 MT specialty steel capacity to materialise by FY 2031 [2].

7. Prelims Hooks

• PLI Specialty Steel Scheme approved by Union Cabinet on 22 July 2021 [3].
• Parent scheme outlay: ₹6,322 crore [3].
• Original five product categories include Electrical Steel (CRGO) [3].
• Highest original incentive slab: 12% for CRGO; PLI 1.2 raises ceiling to 15% [2][3].
• Implementing ministry: Ministry of Steel (Cabinet Minister: H.D. Kumaraswamy, also holds Heavy Industries) [1].
• PLI 1.2 launched 04 November 2025; MoUs signed 09 February 2026 at Vigyan Bhawan [1][2].
• PLI 1.2: 85 projects, 55 companies, ₹11,887 cr, 8.7 MT capacity [1].
• PLI 1.2 product structure: 4 categories, 22 sub-categories [2].
• Incentive disbursement begins FY 2026-27 [2].
• Original projected investment: ₹40,000 cr; capacity addition 25 MT [3].
• PLI umbrella covers 14 sectors with outlay ₹1.97 lakh crore (Nov 2020) [5].

8. Mains Relevance

• GS-III: Indian Economy — Growth, Development, Employment; Industrial Policy; Infrastructure.

• Syllabus: "Effects of liberalization on the economy" / "Industrial growth"; "Government Budgeting".

• Plausible stems: 1. "Production-Linked Incentive schemes have shifted India's industrial policy from protectionism to performance-based subsidies. Critically examine with reference to the Specialty Steel sector." 2. "Despite being the world's second-largest crude steel producer, India remains a net importer of specialty steel. Discuss the causes and evaluate the PLI Scheme as a corrective." 3. "Examine how PLI schemes can advance the Atmanirbhar Bharat objective in strategic-use materials such as CRGO electrical steel."

9. Related Topics

• National Steel Policy 2017 — target of 300 MT crude steel capacity by 2030.
• Other PLI sectors (semiconductors, white goods, auto, solar PV) — comparative outlay/design.
• Atmanirbhar Bharat Abhiyan — overarching framework.
• CRGO electrical steel & power-sector transformers — strategic import dependency.
• SAIL, RINL — PSU role in specialty steel.
• Green Steel / Hydrogen-based DRI — decarbonisation track parallel to PLI.
• Steel Import Monitoring System (SIMS) — trade-side complement.
• EV mission (FAME / PM E-Drive) — downstream demand for electrical steel.

10. Common Errors / Trap Areas

• Ministry is Ministry of Steel, NOT Ministry of Heavy Industries (though the same minister holds both portfolios).
• PLI was approved in 2021 but operates from FY 2023-24; scheme duration ends FY 2027-28, not 2025.
• CRGO (grain-oriented) gets the highest incentive — not stainless or rail steel.
• PLI 1.2 is the third round, not the second (sequence: Round-1 → PLI 1.1 → PLI 1.2).
• ₹11,887 cr is the committed private investment under PLI 1.2, not government outlay (outlay remains ₹6,322 cr).