PLI scheme for auto sector gets green signal, big gains for EVs and FCEVs 

In what is a big positive for India Auto Inc, the government of India has approved the PLI (Production-Linked Incentive) scheme for the automobile and the drone industry. It has a budgetary outlay of Rs 26,058 crore.

The PLI Scheme aims to draw fresh investments of over Rs 42,500 crore by 2026 and incremental production of over Rs 2.3 lakh crore for the automobile and auto component industries. It will also  improve manufacturing capabilities and “enable India to leapfrog to environmentally cleaner electric vehicles and hydrogen fuel vehicles.

Welcoming the PLI scheme, Sunjay Kapur, President ACMA said, “ACMA is grateful to the Prime Minister of India, Narendra Modi for the announcement of the PLI scheme for the auto and auto components industry. In accordance with our national priorities of energy security and climate change & environment, the PLI scheme envisions creation of an ‘Atmanirbhar’ (self-reliant), globally competitive and future-ready Indian automotive sector. Thrust on incentivising new age technologies will facilitate creation of a state-of-the-art automotive value chain in the country and give a much-needed impetus to manufacturing of cutting edge automotive products in India.”

He added, “Further, with global economies de-risking their supply chains, the PLI will aid India in developing into an attractive alternative source of high-end auto components”.

Earlier, the Government of India had announced the PLI for ACC batteries with an outlay of Rs. 18,100 crore (~USD 2.5 billion) aimed at inviting investments for manufacturing for advanced energy storage technology batteries, a first step towards creating a robust infrastructure for electric mobility in India

Commenting on the green signal for the PLI Scheme, Girish Wagh, Executive Director, Tata Motors, said: “We at Tata Motors are much encouraged with the new PLI scheme announced for the auto sector. This scheme is both progressive and transformational. It reiterates India’s holistic commitment to a sustainable future and accelerates the country’s progress towards green mobility. Several meaningful incentives have been offered across the entire value chain engaged in manufacturing of battery powered EVs and hydrogen fuel cell, as well as their supporting infrastructure and exports. Encouraging production of auto components using advanced technologies will boost localisation, domestic manufacturing and also attract foreign investments. This will help component manufacturers strive for scale, which will require setting up of new facilities and create more jobs. With auto being a strategically important sector of the economy, the benefits accrued overall will result in a multiplier effect..”

Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors, said: “The government has taken a holistic approach to make India ‘Aatmanirbhar’, especially in technology areas, that will be relevant and important in future. The scheme promotes manufacturing, export of EVs and those running on hydrogen fuel cells, their supporting infrastructure, as well as new technology auto parts requiring advanced production techniques. A progressive scheme which will help in accelerating transition to smart, environment-friendly, sustainable mobility solutions. The automotive ecosystem will benefit tremendously as more jobs will be created, component manufacturers can plan their future roadmap better and achieve scale. It is indeed a very strong resolve shown by the government to fulfill the aspiration of India, by becoming a global manufacturing hub of green mobility.”