Government’s approval on Production Linked Incentive (PLI) Scheme for Auto industry.

The PLI Scheme was launched by Shri Arun Goel, IAS, Secretary, Ministry of Heavy Industries, Government of India in The inaugural ceremony was attended by ACMA & SIAM members.

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 budgetary outlay of ₹ 26,058 crore. The PLI scheme for the auto sector will
incentivize high value Advanced Automotive 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 announcement 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 cost disabilities to 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 investment of over ₹42,500
crore, incremental production of over ₹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 investors
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
Champion OEM Incentive scheme 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 Advanced Automotive Technology components
of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates
of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc.