Govt nods PLI scheme for automobiles and auto components

The recently approved Production Linked Incentive (PLI) scheme for automobiles and auto components has been announced by the government. Existing auto companies and new non-auto investors are eligible for incentives under the programme. Champion OEM Incentive Program and Component Champion Incentive Program are the two parts of it. Champion OEM Incentive is a sales-based incentive programme applicable to battery electric vehicles (BEVs) and hydrogen fuel cell vehicles. This component offers a 13-18% incentive. It is also applicable in vehicles with any other advanced automotive technology approved by the Ministry of Heavy Industries. The incentive offered to EV manufacturers under the Champion OEM Incentive programme will be separate from the FAME II programme, which provides incentives to customers rather than manufacturers. BEVs with Advanced Chemistry Cell (ACC) batteries, for which separate incentives have been declared under the PLI programme, are eligible for incentives under this programme. The Component Champion Incentive is a sales-based programme that offers incentives ranging from 8% to 13% on pre-approved advanced automotive technology components in all vehicles. Component manufacturers of electric vehicles and hydrogen fuel cell vehicles will receive an additional 5% incentive. It also covers CKD and SKD kits, vehicle aggregates of two- and three-wheelers, passenger vehicles, commercial vehicles, tractors, and military automobiles. A company or a consortium with a presence in India or globally in the automotive vehicle and component manufacturing business must have a minimum revenue of Rs 100 billion for an auto OEM and Rs 5 billion for an auto component manufacturer to be eligible. The company or its consortium should invest Rs 30 billion in fixed assets for auto OEMs and Rs 1.5 billion for auto component manufacturers. New non-automotive investor companies or their consortium may be eligible for incentives if they present a detailed business plan for investing in India and generating revenue from advanced automotive technology vehicles or component manufacturing. They should have a net worth of Rs 10 billion, based on audited financial statements for the fiscal year ending March 31, and make a five-year commitment to invest in India. The PLI programme could generate over Rs 425 billion in investments and Rs 2.3 trillion in incremental production in the next five years. More than 750,000 jobs are expected to be created as a result of the programme. Image SourceAlso read: Govt approves advanced chemistry cell PLI scheme