115 companies file applications under PLI Scheme for Automobile and Auto Component Industry

A total of 115 companies have filed their applications under the Production Linked Incentive Scheme (PLI) for the Automobile and Auto Component Industry. The Ministry of Heavy Industry said that incentives will be provided under the scheme for the products and components manufactured in the country from 1st April of this year for five consecutive years.

The Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India was notified on September 23, 2021. The scheme was open for receiving applications till 23:59:59 hours IST on January 9, 2022.

The Government approved the Production Linked Incentive Scheme for the Automobile and Auto Components Industry in India for enhancing the country's manufacturing capabilities for advanced automotive products with a budgetary outlay of Rs 25,938 crore. The PLI scheme is aimed to provide financial incentives to boost domestic manufacturing of automotive 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 PLI scheme for the auto sector will incentivize 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 indigenous supply chain/ deep localization of Advanced Automotive Technology products.

The PLI Scheme for the auto sector was open to existing automotive companies as well as new investors who are currently not in the 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.

This PLI Scheme for the automotive sector (Rs 25,938 crore) along with the already 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) will enable India 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 as well as globally headquartered groups engaged in/ proposing to manufacture Advanced Automotive Technology vehicles/ products.

The industry has reposed its faith in India's stellar progress as a world-class manufacturing destination which resonates strongly with Prime Minister's clarion call of AtmaNirbhar Bharat - a self-reliant India.