Government’s approval on Production Linked Incentive (PLI) Scheme for Auto industry
Chennai, Sept 20, 2021: The PLI Scheme was launched by Shri Arun Goel, IAS, Secretary, Ministry of Heavy Indu stries, Government of India in Chennai. The inaugural ceremony was attended by ACMA & SIAM members.
(C) Arun Goel, IAS, Secretary, Ministry of Heavy Industries, Government of India
Taking steps forward towards the vision of an ‘Aatmanirbhar Bharat’, Government led by Hon’ble Prime Minister, Shri Narendra Modi, has approved the PLI Scheme for Automobile Industry and Drone Industry with a budget ary outlay of ₹ 26,058 crore. The PLI scheme for the auto sector will incentivize high value Advanced Automot ive Technology vehicles and products. It will herald a new age in higher technology, more efficient and green automotive manufacturing.
PLI Scheme for Automobile Industry and Drone Industry is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of ₹ 1.97 lakh crore. With the announc ement of PLI Schemes for 13 sectors, minimum additional production in India is expected to be around ₹ 37.5 lakh crore over 5 years and minimum expected additional employment over 5 years is nearly 1 crore.
The PLI Scheme for the auto sector envisages to overcome the co st disabilities to the industry for manufacture of Advanced Auto motive Technology products in India. The incentive structure will encourage industry to make fresh investments for indigenous glo bal supply chain of Advanced Automotive Technology products. It is estim ated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investment of over ₹42,500 crore, incremental production of over ₹2.3 lakh crore and will create additi on al 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 investors who are cur rently not in automobile or auto component manufacturing business. The scheme has two components viz Cha mpion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive sc heme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments. The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanc ed Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (S KD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc.
This PLI Scheme for automotive sector along with the already launched PLI scheme for Advanced Chemistry Cell (ACC) (₹18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) (₹10,000 crore) will enable India to leapfrog from traditional fossil fuel based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.
The PLI Scheme for the Drones and Drone components industry addresses the strategic, tactical and operational uses of this revolutionary technology. A product specific PLI scheme for drones with clear revenue targets and fo cus on domestic value addition is key to building capacity and making these key drivers of India’s growth strateg y. The PLI for Drones and Drone components industry, will over a period of three years, lead to investments wor th ₹ 5,000 Crore, increase in eligible sales of ₹ 1500 crore and create additional employment of about 10,000 jobs.
