How MSMEs Can Benefit from India’s New PLI 1.2 Scheme

India’s PLI Scheme in India (Production Linked Incentive Scheme) is a government initiative designed to boost local manufacturing, reduce imports, and make Indian industries globally competitive. It offers direct financial incentives based on production output.

The production linked incentive scheme supports high-impact sectors Specialty Steel being one of themused in defense, aerospace, EVs, and infrastructure.

Importantly, the government also provides manufacturing funding to help India achieve self-reliance and become a global manufacturing powerhouse.

PLI Steel Scheme 1.2: What’s New in the Third Round?

Launched in November 2025 by Union Minister H.D. Kumaraswamy, the India Steel PLI Scheme 1.2 marks the third round of the PLI 1.2 Steel Scheme, under the broader PLI Steel Scheme.

Key updates include:

• Base year revised to 2024–25 (earlier was 2019–20)
• Relaxed investment and production thresholds to encourage MSME participation
• Focus on advanced steel categories:
  • Super Alloys
  • CRGO Steel
  • Stainless Steel (Flat & Long)
  • Titanium Alloys
  • Coated Steels

The scheme is now more inclusive, innovation-friendly, and globally aligned.

Why the PLI Scheme Matters for MSMEs in 2025

The PLI Scheme for MSME is a turning point in 2025. Traditionally, PLI Steel Scheme benefits were captured by large manufacturers. But PLI 1.2 Steel Scheme brings relaxed conditions that allow MSMEs to:

• Enter high-grade steel manufacturing
• Earn production-based cash incentives
• Access advanced tech without high capital risk

The PLI Scheme Benefits now reach deeper into the small business ecosystem, directly supporting the Government Grants for MSMEs framework.

PLI Scheme Guidelines: Who Is Eligible and How to Apply

As part of the PLI 2.0 Scheme, new PLI Scheme Guidelines were issued to ensure wider inclusion.

Eligibility:

• Registered manufacturing units in India
• Companies investing in specialty steel products
• Proof of production expansion or tech upgrade

How to apply:

1. Check category eligibility under PLI 1.2 Steel Scheme
2. Register on the official PLI portal
3. Submit documents showing manufacturing capacity and investment plans
4. Await selection based on production targets

Top Benefits of the PLI 1.2 Steel Scheme for Manufacturers

The updated PLI Steel Scheme offers unmatched advantages:

• Cash rewards for each tonne produced in eligible categories
• Lower barriers for MSMEs under revised thresholds
• Focus on future-ready steel products for export
• Technological advancement support
• Complements PLI Scheme in India and national Make in India efforts

The PLI Scheme Benefits go beyond funding—they empower small industries to lead in value-added steel.

How This Scheme Aligns with Government Grants for MSMEs

The PLI Scheme in India works alongside Government Grants for MSMEs by combining:

• Incentives for post-production output via PLI
• Upfront manufacturing funding via central/state grants for tech upgrades, R&D, and capacity building

Together, they enable MSMEs to start lean, grow fast, and stay globally competitive.

StartupFlora’s Role: Helping MSMEs Access PLI and Grants Easily

At StartupFlora, we simplify access to the PLI Scheme for MSMEs and Government Grants for MSMEs.

We help:

• Identify relevant schemes like PLI 2.0 Scheme, PLI Steel Scheme, and grant programs
• Verify MSME eligibility based on PLI Scheme Guidelines
• Apply under India Steel PLI Scheme 1.2 smoothly
• Maximize approval chances through guided support

StartupFlora has empowered MSMEs in manufacturing, renewables, and mobility sectors to unlock production linked incentive scheme benefits.

Is Your Business Ready for the New Steel PLI Opportunities?

With over ₹43,800 crore already committed under earlier rounds of the PLI Scheme, including the PLI Steel Scheme, the government’s intent is clear.

You now have the chance to:

• Leverage the PLI Scheme in India for steel and specialty production
• Pair it with Government Grants for MSMEs for maximum impact
• Join India’s advanced manufacturing wave with smart manufacturing funding support

PLI 1.2 Steel Scheme is not just an opportunity it’s your invitation to be part of India’s industrial transformation.

FAQs

1. What is the India Steel PLI Scheme 1.2?
It’s the third round under the PLI Steel Scheme, targeting production-linked incentives for specialty steel products.

2. Who can apply under PLI 1.2 Steel Scheme?
Any Indian MSME or manufacturer investing in eligible steel categories.

3. What are the eligibility guidelines?
Refer to updated PLI Scheme Guidelines under the PLI 2.0 Scheme for sector-specific requirements.

4. How much has been invested so far?
₹43,874 crore has been committed across PLI rounds, generating 30,760+ jobs.

5. Can MSMEs combine PLI and government grants?
Yes. Use PLI Scheme Benefits for production incentives and Government Grants for MSMEs for early-stage support.

6. What products are covered under PLI Steel Scheme?
Super alloys, CRGO steel, coated steels, stainless steel (flat and long), and titanium alloys.

7. Does StartupFlora help with both PLI and MSME grants?
Yes. We guide MSMEs through PLI Scheme for MSME applications and government grant submissions end-to-end.

8. What is the PLI scheme for the textile sector?
The PLI scheme for textiles aims to boost production of man-made fibers and technical textiles in India by offering financial incentives to manufacturers meeting scale and investment criteria.

9. How does the PLI scheme support food processing in India?
The PLI scheme for food processing provides subsidies to companies producing ready-to-eat foods, dairy, marine, and organic products, helping them scale and access export markets.

10. What is a PLI scheme calculator and how can it help?
A PLI scheme calculator is a tool used to estimate the incentive amount a business may receive under a specific PLI scheme based on investment, output, and sector benchmarks.