Three additional vehicle manufacturers and five more auto component makers will begin availing financial incentives under the production-linked incentive (PLI) scheme for the automobile sector from 2026–27, taking the total number of beneficiary companies from 10 at present to 18 by the end of FY27, according to Hanif Qureshi, Additional Secretary at the Ministry of Heavy Industries. The automobile PLI scheme was approved by the Union Cabinet on September 15, 2021, with a total outlay of Rs 259.38 billion over five years. Of the 115 companies that applied, 82 vehicle and auto component manufacturers were approved under the scheme.

Speaking at a media briefing, Qureshi said the government will invoke the bank guarantees of 10 approved companies that failed to make any investment over the past two financial years. All 10 firms are auto component manufacturers. He explained that participation in the scheme requires companies to furnish a bank guarantee, which can be invoked if there is zero investment in two consecutive years, as stipulated in the guidelines.

Disbursements under the scheme have accelerated over time. The ministry disbursed Rs 26.3 million in FY24 and Rs 3.25 billion in FY25. In FY26, around Rs 20 billion has been disbursed so far, out of Rs 20.91 billion sanctioned for the full year. Qureshi said payouts were modest in the initial years as approved companies were still setting up manufacturing capacities and meeting the domestic value addition threshold of over 50 per cent, a key eligibility condition. He added that sanctioned incentives are expected to rise multi-fold in the next financial year as more firms begin selling vehicles compliant with localisation norms and start claiming benefits.

In FY26, five vehicle manufacturers—Mahindra & Mahindra, Tata Motors, Bajaj Auto, TVS Motor and Ola Electric—along with four auto component makers have received or will receive incentives. The component firms are Delphi-TVS Technologies, Sona BLW Precision Forgings, Bosch Automotive Electronics India and Tata Autocomp Systems. Toyota Kirloskar Auto Parts, which availed incentives in FY25, will not do so in FY26 but is expected to resume participation from FY27.

From FY27 onwards, vehicle manufacturers Eicher Motors, Pinnacle Mobility Solutions and Hero MotoCorp are expected to start availing incentives, along with five auto component makers—Dana TM4 India, Uno Minda, Varroc Engineering, Napino Auto and Cummins Technologies India.

Under the scheme so far, incentives have supported production of about 1.042 million electric two-wheelers, 238,385 electric three-wheelers, 79,540 electric four-wheelers and 1,391 electric buses, reflecting the growing scale of India’s electric mobility ecosystem.