H.D. Kumaraswamy launches PLI 1.2: Major Push to India’s Specialty Steel Ecosystem

I have sufficient grounded facts. Writing the note now.

H.D. Kumaraswamy launches PLI 1.2 — Specialty Steel Ecosystem

PLI 1.2 is the third round of the Production Linked Incentive Scheme for Specialty Steel, launched by the Ministry of Steel on 9 February 2026 at Vigyan Bhawan, New Delhi [S1][S2].
Targets import substitution in high-value steel grades (CRGO, super alloys, titanium alloys, stainless flat/long) and aligns with the Atmanirbhar Bharat manufacturing push [S2].
Examinable as part of UPSC GS-III (industrial policy, manufacturing, PLI schemes).

Union Minister of Steel & Heavy Industries H.D. Kumaraswamy launched PLI 1.2 on 9 Feb 2026, with simultaneous signing of 85 MoUs with 55 companies committing ₹11,887 crore in investment [S1][S2].
Round adds an expected 8.7 million tonnes of specialty steel capacity by FY 2031 [S2].

22 July 2021 — Union Cabinet approved original PLI Specialty Steel with ₹6,322 crore outlay over 5 years [S3].
29 July 2021 — Notified in Gazette; 20 Oct 2021 — Scheme Guidelines issued [S3].
Round 1 (PLI 1.0, 2022) — 67 applications from 30 companies selected; commitments of ~₹46,000 crore investment, 28 MT downstream capacity addition by 2030 [S3].
PLI 1.1 — Launched by H.D. Kumaraswamy to re-open window for fresh participants [S2].
PLI 1.2 (Feb 2026) — Third round expanding product scope and FY window [S1][S2].

Implementing Ministry: Ministry of Steel (not Ministry of Heavy Industries; though same minister holds both portfolios) [S1].
Original outlay: ₹6,322 crore (5-year) [S3].
PLI 1.2 product categories (4): (i) Steel Grades for Strategic Sector, (ii) Commercial Grades – Cat 1, (iii) Commercial Grades – Cat 2, (iv) Coated & Wire Products — 22 sub-categories [S2].
Incentive range: 4% to 15% of incremental sales, max 5 years, starting FY 2025–26; disbursal from FY 2026–27 [S2].
PLI 1.2 commitments: 85 MoUs, 55 companies, ₹11,887 crore, 8.7 MT capacity by FY 2031 [S2].
Original 5 product categories (2021): Coated/Plated Steel, High Strength/Wear Resistant Steel, Specialty Rails, Alloy Steel Products & Steel Wires, Electrical Steel [S3].
Eligibility: Companies registered in India doing end-to-end manufacture of notified products [S2].

Economic: Reduces import bill on CRGO (used in transformers) and stainless/titanium alloys; deepens value addition beyond crude steel where India is already world's 2nd largest producer [S2].
Strategic: Inclusion of a dedicated "Steel Grades for Strategic Sector" category caters to defence, space and nuclear use-cases (super alloys, titanium alloys) [S2].
Administrative: Tiered incentive (4–15%) ties payout to incremental sales — performance-linked, not capex-linked, reducing fiscal risk vs. older subsidy regimes [S2].
Technological: Pushes domestic R&D into electrical steel (CRGO) — currently import-dependent from Japan/Korea — critical for power-sector self-reliance [S2].
Federal/Industrial: Pan-India scheme; participation skewed to states with integrated steel hubs (Odisha, Jharkhand, Chhattisgarh, Karnataka, Gujarat).

9 Feb 2026 — PLI 1.2 launched; MoUs signed at Vigyan Bhawan [S1][S2][S4].
2025 — PLI 1.1 round opened by Min. Kumaraswamy to onboard left-out specialty steel makers [S2].
FY 2025–26 — Marked as first year of PLI 1.2 incentive eligibility window [S2].

PLI Specialty Steel first approved by Union Cabinet on 22 July 2021 with ₹6,322 crore outlay [S3].
Nodal Ministry: Ministry of Steel (NOT Ministry of Commerce/DPIIT) [S1].
Scheme notified in Gazette on 29 July 2021; guidelines on 20 Oct 2021 [S3].
PLI 1.2 launched 9 February 2026 at Vigyan Bhawan, New Delhi [S1].
Incentives: 4%–15% of incremental sales, for 5 years [S2].
PLI 1.2 covers 22 sub-categories under 4 product categories [S2].
85 MoUs signed with 55 companies; ₹11,887 crore committed [S2][S4].
Expected capacity addition: 8.7 MT by FY 2031 [S2].
Disbursal begins FY 2026–27 [S2].
Original PLI 1.0 covered 5 specialty steel categories including Electrical Steel and Specialty Rails [S3].
Union Minister H.D. Kumaraswamy holds both Steel and Heavy Industries portfolios [S1].
India is the world's 2nd largest crude steel producer (context fact).

GS-III — Indian Economy: Industrial Policy; Infrastructure; Government schemes for growth.
Syllabus: "Government Budgeting; Effects of liberalization on the economy; changes in industrial policy."
Question stems: 1. "PLI schemes mark a shift from input-subsidy to output-linked industrial policy in India." Discuss with reference to Specialty Steel. 2. Evaluate the role of the PLI Scheme for Specialty Steel in reducing India's import dependence in high-value steel grades such as CRGO and super alloys. 3. Discuss how successive rounds (1.0, 1.1, 1.2) of the Specialty Steel PLI scheme reflect adaptive industrial policy design.

National Steel Policy 2017 — sets 300 MT capacity target by 2030–31.
PM GatiShakti — logistics for steel-coal-port linkages.
PLI schemes (14 sectors) — comparative outlays and ministries.
CBAM (EU Carbon Border Adjustment) — direct threat to Indian steel exports.
Green Steel Mission / Hydrogen Mission — decarbonisation of steel.
Critical minerals — nickel, cobalt, vanadium feed into specialty steel.
JPC (Joint Plant Committee) — data body under Ministry of Steel.
Mines & Minerals (Development and Regulation) Amendment Act — iron ore auctions.

Confusing PLI 1.0 outlay (₹6,322 cr) with PLI 1.2 committed investment (₹11,887 cr) — these are different metrics.
Wrongly attributing scheme to Ministry of Heavy Industries — it is Ministry of Steel (Kumaraswamy holds both) [S1].
Mixing PLI Specialty Steel (5-year, 4–15% incentive) with PLI Auto (different rates).
Assuming PLI covers all steel — it covers only specialty/high-value grades, NOT crude/long products for construction.
Confusing CRGO (Cold Rolled Grain Oriented electrical steel) with CRNGO — both electrical, only CRGO is highly import-dependent.

[S1] H.D. Kumaraswamy launches PLI 1.2: Major Push to India's Specialty Steel Ecosystem — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2225503 — (tier 1)
[S2] Union Minister of Steel and Heavy Industries launches the third round of PLI scheme for Specialty Steel (PLI scheme 1.2) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2186206 — (tier 1)
[S3] Union Cabinet approves Production-linked Incentive (PLI) Scheme for Specialty Steel — https://www.pib.gov.in/PressReleasePage.aspx?PRID=1737722 — (tier 1)
[S4] Ministry of Steel Signs MoUs for 85 Specialty Steel Projects Involving Investment of ₹11,887 Crore — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2225496 — (tier 1)