The production linked incentive scheme for the automobile and auto component sectors will create incremental output of ₹2,31,500 crore over the next five years and enable India to increase its share in global trade of environment-friendly advanced automotive products, said senior government officials.
“The incentives on approved products will be disbursed annually based on actual sales. Manufacturers can gain more incentives by producing more, be it for the local market or for exports. The scheme is estimated to result in incremental production of ₹231,500 crore over the next five years,” Arun Goel, secretary, ministry of heavy industries said. PLI will also encourage auto and auto parts makers to invest in setting up a local base for advanced auto products.
The government has already received investment proposals to the tune of ₹45,016 crore from the 20 approved applicants of PLI auto scheme. They include Hyundai Motor India, Suzuki Motor Gujarat, Ashok Leyland, Mahindra & Mahindra, Hero MotoCorp, Bajaj Auto and Ola Electric Technologies. The investment proposals received from OEMs alone have surpassed the overall investment of ₹42,500 crore the government had envisaged from auto and auto component makers.
The list of approved candidates from the component sector will be announced in a month.
Goel added, “World over, the share of advanced auto technologies in overall auto business currently stand at 18%. This will increase to 30% by 2030. In India, this share is a mere 3%. The PLI scheme has been designed to help us keep pace with the technological advancements taking place and move up the value chain. ”
The 50% value-addition criteria additionally is expected to deepen localisation levels of tier-2/3 suppliers and thereby generate employment in the MSME sector.
The PLI scheme for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products.