PLI Scheme: Huge success! Modi govt receives applications from 115 automobile, auto-component firms

A total of 115 companies have filed their application under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India according to a government release. The notification on PLI was issued on September 23, 2021.

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PLI scheme for automobile and auto components industry has been a “huge success” in terms of the applications received from local as well as globally headquartered groups, as per the government’s claims.

The government has approved the PLI Scheme for Automobile and Auto Components Industry in India for enhancing India’s manufacturing capabilities for advanced automotive products with a budgetary outlay of Rs 25,938 crore, as per the release from the Ministry of Heavy Industry.

Government’s PLI scheme proposes financial incentives to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain.

Its prime objectives include overcoming cost disabilities, creating economies of scale and building a robust supply chain in areas of advanced automotive technology products. It will also generate employment. This scheme will facilitate the automobile Industry to move up the value chain into higher value-added products, the government release said.

The PLI scheme for the auto sector will incentivize high value Advanced Automotive Technology vehicles and products. The incentive structure is expected to encourage industry to make fresh investments in indigenous supply chain/deep localization of Advanced Automotive Technology products.

The PLI Scheme for auto sector was open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business. The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments. The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors, etc.

 Government has also launched PLI scheme for Advanced Chemistry Cell (ACC) (Rs 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles(FAME) (Rs 10,000 crore) to incentivise Electric Vehicles (EV) in the country.