In a significant move to bolster India’s manufacturing capabilities in the advanced automotive sector, including electric vehicles (EVs), the Government of India approved the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components Industry (PLI-Auto) on September 15, 2021. With a substantial budgetary outlay of Rs. 25,938 crores, this initiative aims to transform India into a global hub for cutting-edge automotive products and technology.
Major Investments and Sales Growth
As of March 31, 2024, the PLI-Auto Scheme has garnered considerable investment commitments from approved applicants, amounting to Rs. 17,896 crores. This significant financial injection has already spurred incremental sales worth Rs. 3,370 crores, underscoring the scheme’s potential to drive substantial economic growth and innovation in the automotive industry.
Extension and Implementation
Recognizing the need for continued support and momentum, the Government extended the tenure of the PLI-Auto Scheme by one year. This extension was formalized through Gazette Notifications no. SO 5486(E) and SO 5487(E) on December 29, 2023. This extension provides additional time for stakeholders to maximize the benefits and further solidify India’s position in the global automotive market.
Application Window and Operational Procedures
The application window for the PLI-Auto Scheme closed on January 9, 2022. According to the scheme guidelines, there will be no further rounds of selection for firms, ensuring a focused and streamlined approach to implementation. To facilitate the effective execution of the scheme, two Standard Operating Procedures (SoPs) have been issued. The SoP for Domestic Value Addition (DVA) calculation was released on April 27, 2023, followed by the SoP for Disbursement Claim Incentive on July 25, 2024. These procedures aim to expedite the processes, ensuring timely and efficient disbursement of incentives to eligible firms.
Government’s Commitment and Future Prospects
In a written reply in the Rajya Sabha today, the Minister of State for Heavy Industries and Steel, Bhupathi Raju Srinivasa Varma, provided an update on the progress and impact of the PLI-Auto Scheme. He emphasized the Government’s unwavering commitment to fostering a robust and innovative automotive industry in India, particularly in the electric vehicle segment.
The PLI Scheme’s success is expected to not only enhance India’s manufacturing capabilities but also contribute significantly to the country’s goals of sustainability and environmental conservation. As the world shifts towards greener and more sustainable modes of transportation, India’s proactive measures and strategic investments in the EV sector position it as a pivotal player on the global stage.
With continued government support and industry collaboration, the future of India’s automotive sector looks promising, paving the way for advancements in technology, increased investments, and a stronger, more sustainable economy.
