The scheme to incentivise advanced automotive technologies for five years will lead to fresh investment of over Rs 42,500 crore
Chennai: The Cabinet on Wednesday approved a Rs 26,058-crore production linked incentive (PLI) scheme for auto, auto-components and drone industries.
The scheme to incentivise advanced automotive technologies for five years will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and creation of over 7.5 lakh jobs, the government said.
The scheme is open to existing automotive companies as well as new investors who are not into automobile or auto component manufacturing. The scheme has two components—Champion OEM Incentive Scheme and Component Champion Incentive Scheme.
The Champion OEM scheme is a ‘sales value linked' scheme applicable on battery electric vehicles and hydrogen fuel cell vehicles of all segments. The Component Champion scheme is a ‘sales value linked' scheme applicable on advanced automotive technology components of vehicles, completely kno-cked down/ semi-knocked down kits, vehicle aggregates of two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors.
"The beneficiaries in the PLI scheme for the auto sector are likely to be 10 vehicle manufacturers, 50 auto-component manufactures and five new non-automotive investors planning to enter into the automotive sector. With the limited budget of Rs 26,000 crore, the industry will see a tough competition with respect to the award of the PLI scheme," said EY India tax partner (automotive sector) Saurabh Agarwal.
The government has already launched an Rs 18,100 crore PLI scheme for advanced chemistry cell and also awarded Rs 10,000 crore under the Faster Adoption of Manufactur-ing Electric Vehicles (FAME II) scheme to push electric mobility.
“The recent announcements by the government have helped to propel the EV industry onto its next level. By allocating a total of Rs 26,000 crore to push adoption of cleaner mobility and technologies, this sector is poised to grow exponentially from here on,” said Naveen Munjal, MD, Hero Electric.
Further, the PLI scheme for the drones and drone components industry over three years is expected to bring in investments worth Rs 5,000 crore, generate sales of Rs 1500 crore and create over 10,000 jobs.