Heavy Industries Ministry Notifies PLI Scheme for Auto Sector


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The government has notified the production linked incentive (PLI) scheme for automobile and auto components industry in India for enhancing the country’s manufacturing capabilities of advanced automotive products with a budgetary outlay of ₹25,938 crore.

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.

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The scheme for Automobile and auto components will be implemented over a period of five years starting from FY 2022-2023.

Incentive payable under this scheme to electric vehicle (EV) manufacturers will be independent of/in addition to the incentives given under FAME-II scheme where incentives are provided to customers who buy the vehicles and not to the manufacturers. Under this PLI scheme, incentives are being given to manufacturers not the consumers, the notification further said.

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