The Indian auto sector invested Rs 14,043 crore by March under the government’s 5-year production-linked incentive (PLI) scheme for automobile and auto components. This information was revealed in the Economic Survey presented in parliament on Monday.
The government launched the Rs 25,938 crore PLI scheme to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. The total proposed investment under the scheme is estimated at Rs 67,690 crore.
Initially, the incentives were applicable from the financial year 2022-23 for five consecutive years until 2026-27. However, the scheme was later extended by one year to March 31, 2028. The scheme has two parts: the Champion OEM incentive scheme for battery electric and hydrogen fuel cell vehicles, and the Component Champion incentive scheme for high-tech components.
The government approved 18 companies under the Champion OEM category, including Maruti Suzuki, Toyota Kirloskar, Tata Motors, Hyundai Motor India, and Ola Electric. In the Component Champion category, 67 companies got approval, including Sona BLW Precision, Bharat Forge, Bosch, and Minda Corp.
Incentives are given for products with a minimum domestic value addition of 50%. The total incentive for an entire group company is capped at Rs 6,485 crore. The scheme aims to overcome cost disadvantages, create economies of scale, generate employment, and build a robust supply chain in advanced automotive technology.
“Applicants have proposed to generate 1.48 lakh jobs, with 28,884 jobs created by 31/03/2024,” the Economic Survey stated. The survey also noted that the growth in domestic production and consumption of automotive parts slowed between 2019-20 and 2022-23, compared to the previous five years, due to the pandemic’s impact on demand and production.
