The Automotive Research Association of India (ARAI) is working to complete the certification process for domestic value addition (DVA) under India’s production-linked incentive (PLI) scheme. Recent announcements from companies like Ola Electric and Bajaj Auto revealed their products have received DVA certification, but nearly a third of the applications submitted are still awaiting approval.
The Government of India increased the budget allocation for the automotive industry’s PLI scheme to ₹3,500 crore for the current year, up from ₹483.77 crore disbursed last year. To access these funds, manufacturers must prove that their products include at least 50% value addition in India, meaning the value of imported components and services should not exceed 50% of the final product’s value.
The PLI scheme provides ₹26,000 crore in subsidies to auto and auto parts manufacturers between April 2023 and March 2027. Six automakers—Tata Motors, Mahindra & Mahindra, Ola Electric, Bajaj Auto, TVS Motor, and Eicher Motors—have applied for these funds, which are distributed based on pre-approved investment and sales plans.
Out of the 74 vehicles submitted for DVA certification, 50 have been approved, while the rest are under evaluation. Tata Motors leads with 27 applications, followed by Mahindra & Mahindra with 23, and Bajaj Auto with 13. ARAI officials are working to meet the four-month certification deadline, though they aim to complete the process in less than three months when possible.
Ola Electric and Bajaj Auto have received DVA certification for 4 and 13 products, respectively, while Mahindra & Mahindra has approvals for 16. TVS Motors has two out of five applications approved, and Eicher Motors is still awaiting approval for its submission.
The recent economic survey presented in the Lok Sabha highlighted that the Auto PLI scheme has attracted nearly ₹67,690 crore in investments, with capital investments reaching ₹14,043 crore by March 2024.
The PLI scheme is divided into two parts: the Champion OEM Incentive Scheme and the Component Incentive Scheme. In the component category, SonaComstar has received approval for products like wheel rims integrated with hub motors, while Toyota Kirloskar Auto Parts and Delphi TVS Technologies have received mandates for trans-axles and high-pressure pumps, respectively.
