The production-linked incentive scheme for automobile and automotive component sectors has attracted a proposed investment of ₹74,850 crore, the heavy industries ministry revealed on Tuesday. The target estimate of investment was ₹42,500 crore over a period of five years.
“The proposed investment of ₹ 45,016 crore is from approved applicants under Champion OEM Incentive Scheme and ₹ 29,834 crore from approved applicants under Component Champion Incentive Scheme,” a government statement said.
The production-linked incentive (PLI) scheme for automobile and automobile components industry was notified on September 23, 2022 to boost manufacturing and attract investments in the sector. Prime objectives of the scheme include overcoming cost disabilities, creating economies of scale, building a robust supply chain in areas of advanced automotive technology (AAT) products, and generating jobs. The PLI scheme will extend incentive up to 18% to the selected manufacturers. As per government estimates, the scheme can create 7.5 lakh additional jobs.
Incentives under the scheme are applicable for determined sales of AAT products, in both vehicles and components segments, manufactured in India from April 1, 2022 onwards for a period of five consecutive years. The government has set aside a budgetary outlay of ₹25,938 crore for the initiative. This scheme will facilitate the domestic automobile industry to move up the value chain into higher value-added products, the ministry stated.
The PLI scheme was open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business. A total of 115 companies had applied for the scheme, out of which five had applied for both parts of the scheme, one related to vehicles and another to auto components. Of this, 95 applicants have been chosen for the scheme – 75 for the components part of the scheme, while the ministry had already approved 20 manufacturers for the vehicle part. Two auto OEMs have been selected for both segments. The list of approved manufacturers also includes their subsidiaries.
The list of approved names for the vehicle part of the auto PLI scheme includes Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai, Ford Motors, Kia India, Ashok Leyland, Eicher Motors, Hero MotoCorp, Bajaj Auto, TVS Motor, and Ola Electric.
Among the companies selected under the component part of the PLI scheme are Bosch, Cummins, Minda, Motherson Sumi, Mitsubishi Electric, Schaeffler India, Sharda Motor Industries, Toyota Kirloskar, and others. Maruti Suzuki and Hero MotoCorp have been selected for both parts of the scheme.
Centre believes the scheme will not only bolster India's auto manufacturing industry, but also facilitate the transition to electric mobility. This PLI scheme for automotive sector, worth ₹25,938 crore, along with the already launched PLI scheme for advanced chemistry cell, pegged at ₹18,100 crore, and Faster Adoption of Manufacturing of Electric Vehicles (FAME), at ₹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 heavy industries ministry stated.
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 AAT components of vehicles, completely knocked down (CKD) and semi-knocked down (SKD) kits, vehicle aggregates of two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors, etc.