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DAILY NEWS ANALYSIS

  • 25 September, 2021

  • 12 Min Read

PLI Scheme for Automobile & Auto components

  • The Government has issued Notification regarding Production Linked Incentive (PLI) Scheme for Automobile & Auto components.
  • The PLI Scheme for the auto sector envisages to overcome the cost disabilities of the industry for manufacture of Advanced Automotive Technology products in India.
  • The incentive structure will encourage industry to make fresh investments for indigenous global supply chain of Advanced Automotive Technology products.
  • It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investments of over Rs 42,500 crores, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.
  • Further this will increase India’s share in global automotive trade.
  • The PLI Scheme for Auto sector is open to existing Automotive companies as well as new Non-Automotive investor companies (who are currently not in automobile or auto component manufacturing business).
  • The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme.

  • The scheme for Automobile and auto components will be implemented over a period of five years starting from FY 2022-2023.
  • An approved applicant shall be eligible for benefits for 5 consecutive Financial Years.
  • Financial Year 2019-20 shall be treated as the Base Year for calculation of Eligible sales.
  • An existing automotive company or its Group company(ies)will need to meet the Basic Eligibility criteria to receive incentives. New Non-Automotive Investor company or its Group company(ies)(who are currently not in automobile or auto component manufacturing business) are required to meet the Global Net worth criteria of Rs 1000 crore.

The scheme has following components:

  • Champion OEM Incentive Scheme: The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments and any other Advanced Automotive Technology vehicle prescribed by MHI depending upon technical developments.
  • Component Champion Incentive Scheme: The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on pre-approved Advanced Automotive Technology components of all vehicles, CKD/SKD kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors including automobile meant for military use and any other Advanced Automotive Technology components prescribed by MHI depending upon technical developments.
  • The list of Advanced Automotive Technology Vehicles and Advanced Automotive Technology Components can be modified by MHI from time to time depending upon technological developments.
  • Minimum 50% domestic value addition will be required and Phased Manufacturing Programme similar to FAME-II Scheme will be followed.
  • Pre-approval of eligible product will be done by Testing Agency of MHI as Advance Automotive Product as per the guidelines issued by MHI from time to time.
  • Any eligible product will be incentivized only for once – Component level or Vehicle

Other Production Linked Incentive (PLI) Schemes in India

Source: PIB


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