A total of 115 companies have filed their application under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India, notified on 23rd September 2021.
According to the Ministry of Heavy Industries (MoHI), the scheme was open for receiving applications till 23:59:59 hours IST on 9th January 2022. Incentives are applicable under the scheme for determining sales of Advanced Automotive Technology (AAT) products (vehicles and components) manufactured in India from 1st April 2022 onwards for five consecutive years.
The Government has approved the PLI Scheme for India’s Automobile and Auto Components Industry to enhance India’s manufacturing capabilities for advanced automotive products with a budgetary outlay of INR 25,938 crore.
The 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 Advanced Automotive Technology products. It will also generate employment. In addition, this scheme will facilitate the automobile industry to move up the value chain into higher value-added products.
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| Sl. No. | Primary Category | Number of Applications |
| 1 | Champion OEM (Except 2W & 3W) | 13 |
| 2 | Champion OEM (2W & 3W) | 7 |
| 3 | New Non-Automotive Investor (OEM) Company | 9 |
| 4 | Component Champion | 83 |
| 5 | New Non-Automotive Investor (Component) Company | 3 |
| Total | 115 |
The PLI scheme for the auto sector will incentivise high-value advanced automotive technology vehicles and products. It will herald a new age in higher technology, more efficient and green automotive manufacturing.
The PLI Scheme for the auto sector envisages overcoming the cost disabilities to the industry for manufacturing of advanced automotive technology products in India.
The incentive structure will encourage the industry to make fresh investments in these products’ indigenous supply chain/ deep localisation.
The PLI Scheme for the auto sector was open to existing automotive companies and new investors who are currently not in the automobile or auto component manufacturing business. The scheme has two components: the Champion OEM Incentive Scheme and the Component Champion Incentive Scheme.
The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable to all segments of Battery ElectricVehicles and Hydrogen Fuel Cell Vehicles.
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.
This PLI Scheme for the automotive sector, along with the already launched PLI scheme for Advanced Chemistry Cell (ACC) (INR 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles(FAME) (INR 10,000 crore), will enable the country to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.
The PLI scheme for the Automobile and Auto Component Industry has been a huge success in terms of the applications received from local and globally headquartered groups engaged in/ proposing to manufacture Advanced Automotive Technology vehicles/ products.
The industry has reposed its faith in India’s progress as a world-class manufacturing destination which resonates strongly with the Prime Minister’s clarion call of AtmaNirbhar Bharat - a self-reliant India.