productivity linked incentive (PLI) scheme for auto and component industry is
set to change it in a big way through electric vehicles (EV), new technologies
and new players in the market.
indicated that large auto players such as Hyundai, Tata Motors, Maruti Suzuki
have already started studying their production plan keeping in mind the PLI
scheme. Several smaller players and the startups, who have just recently begun
their journey in the EV space, have also begun discussions to push up
production in line with the PLI scheme.
An analysis done by Kotak Institutional Equities that the
PLI scheme would see rapid adoption by the EV segment, especially two-wheelers
and incumbents will have to step up. For auto component manufacturers, the
government will provide incentives in the range of 8-13% with an additional 5%
incentive for manufacturers of battery cell and hydrogen fuel cell components.
commercial vehicle segment is also steering the opportunity offered under PLI
scheme with interest. The government approved the PLI scheme for the auto
industry with an outlay of Rs 264 billion. The current PLI scheme is targeted
to enable India to leapfrog to EVs and incentivize the emergence of an advanced
automotive technologies supply chain in India. The PLI scheme for the auto sector is open to
existing automotive companies as well as new investors who are currently not in
the automobile or auto component manufacturing business.
scheme has two components, viz. Champion OEM Incentive Scheme — ‘sales value
linked’ scheme, applicable on BEVs and hydrogen fuel cell vehicles of all
segments, and Component Champion Incentive Scheme - ‘sales value linked’
scheme, applicable on advanced automotive technology components of 2-wheelers,
3-wheelers, passenger vehicles, commercial vehicles and tractors.
scheme will be effective from FY2023 for five years and the base year for
eligibility criteria would be FY2020.
Source: News 18