In India’s automobile and auto component industry, 115 companies have filed applications under the Production Linked Incentive (PLI) scheme.
According to a statement from the Ministry of Heavy Industries, incentives are available under the scheme for determining sales of Advanced Automotive Technology (AAT) products (vehicles and components) to be manufactured in India from April 1, 2022, onwards for a five-year period.
The government has approved the PLI scheme for the automobile and auto component industries, with a budgetary outlay of Rs 25,938 crore, to improve India’s manufacturing capabilities for advanced automotive products.
The plan proposes financial incentives to boost domestic AAT manufacturing and attract investments in the automotive value chain.
Its primary goals include overcoming cost constraints, achieving economies of scale, and establishing a stable supply chain for AAT products. It will also result in the creation of jobs. This scheme will make it easier for the automobile industry to move up the value chain and produce higher-value-added goods.
The PLI scheme for the auto sector will incentivize high-value AAT vehicles and products, with the goal of overcoming the industry’s cost barriers to AAT product manufacturing in India.
The incentive structure will encourage companies to invest in new indigenous supply chains and deep localization of AAT products.
According to the statement, the PLI scheme for the automotive sector, combined with the PLI schemes for Advanced Chemistry Cell (ACC) and Faster Adoption of Manufacturing of Electric Vehicles (FAME), will enable India to transition from a traditional fossil fuel-based automobile transportation system to an environmentally cleaner, sustainable, advanced, and more efficient EV-based system.