Production-Linked Incentive (PLI) scheme of Rs 259.38 billion has the potential
to make India an export hub in the global auto supply chain and increase cost competitiveness,
according to ICRA.
ministry of heavy industries estimates that the scheme has potential to bring
fresh investments of over Rs 425 billion. As per ICRA, the scheme aims for a
future-ready and globally competitive Indian auto sector, by fast-tracking
investments in technology and components.
incentives are sales-linked and are expected to range from 13-18% on determined
sales values for OEMs and 8-13% of determined sales values for auto component
manufacturers. An additional 5% is to be given for manufacturing components for
battery electric vehicle and hydrogen fuel cell vehicles. It will be effective
from FY2023 for five years.
assistant vice-president and sector head, ICRA Limited, said that, it will
increase localisation, accelerate investments towards a local EV ecosystem and
has the potential to make India an export hub in the global auto supply chain.
The scheme is also likely to attract foreign investments into India,
capitalizing on global economies de-risking their supply chains.
sector has been one of the key beneficiaries of the PLI scheme. Along with the FAME-II, the State
EV policies (on the demand side) and earlier announced PLI for ACC batteries
(on the supply side), the current PLI scheme will enable India to switch from
fossil-fuel based automobile to green transportation.
The Times Of India