The government is set to start disbursing incentives under the production-linked incentive (PLI) scheme for the automotive and auto components sectors during the January-March quarter of FY25, according to the Ministry of Heavy Industries. Launched in 2021 with a total outlay of ₹25,938 crore, the PLI scheme aims to strengthen domestic manufacturing of advanced automotive technology (AAT) products and attract investments into the automotive value chain.
Initially, the incentives were to be provided based on sales value from FY2022-23 for five consecutive years until 2026-27. However, the scheme’s duration has since been extended by an additional year, now running through March 31, 2028.
The incentives are based on the “determined sales value,” which refers to the incremental eligible sales of a given year over the base year. Disbursements will occur between FY2024-25 and FY2028-29, with the first disbursement expected in FY2024-25. The PLI Auto scheme consists of two components: the Champion OEM (Original Equipment Manufacturer) incentive for battery electric and hydrogen fuel cell vehicles across all segments, and the Component Champion incentive for high-tech and high-value components.
Incentives range from 13% to 18% for components related to electric vehicles and hydrogen fuel cells, while other AAT products receive incentives between 8% and 13%. A key stipulation is that at least 50% of the product’s value must be sourced domestically.
So far, 18 companies, including Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Toyota Kirloskar, and Ola Electric, have been approved under the Champion OEM category. Additionally, 67 companies, such as Sona BLW Precision, Bharat Forge, and Bosch, have been approved under the Component Champion category.
The total investment under the scheme is projected at ₹67,690 crore, with ₹20,715 crore already invested by September 2024, leading to incremental sales of ₹10,472 crore. Tata Motors and Mahindra & Mahindra have already submitted claims for ₹142.13 crore and ₹104.08 crore, respectively, for FY2024 sales, which have been approved by the government.
Minister for Heavy Industries, HD Kumaraswamy, emphasized that applicants are meeting the required 50% domestic value addition (DVA) and that more companies with DVA certificates are expected to begin production in India. He also reiterated the government’s commitment to the “Make in India” initiative and the vision of Atmanirbhar Bharat, positioning India to make a significant impact on the global automotive sector.
