Auto firms challenge PLI's local value addition calculation

11 Aug 2023 CW Team

Automakers participating in the Rs 259.38 billion production-linked incentive (PLI) programme are encountering difficulties in the calculation of local value addition, impeding their acquisition of compliance certificates. The PLI scheme, active since April 2022, aims to stimulate domestic manufacturing of advanced automotive products, particularly electric vehicles (EVs). However, the current formula for calculating domestic value addition (DVA) relies on ex-factory vehicle prices rather than production costs, affecting companies that offer discounted vehicles below production expenses.

The DVA requirement mandates a minimum 50% domestic value addition for eligibility for scheme incentives. As EV manufacturers often sell vehicles at a loss to remain competitive and attract consumers, they argue that the ex-factory cost would better reflect local value addition. The Society of Indian Automotive Manufacturers (SIAM) has petitioned for an adjusted formula, citing that the ex-factory price-based calculation understates real local value added.

Furthermore, auto companies seek an exemption on the costs of imported components like rare-earth magnets and semiconductors, which are crucial for EV production but not yet manufactured in India. While such exemptions have been granted to component makers, OEMs contend that their absence hampers in-house manufacturing of essential parts. The call for a fairer DVA calculation and broader exemptions highlights the challenges and nuances in fostering local EV production through PLI.

Infrastructure Urban

31 Jul 2026

SCLR Extension Nears Completion Linking BKC With Signal-Free Route

The Santacruz-Chembur Link Road (SCLR) extension towards Bandra-Kurla Complex (BKC) via the Mumbai University campus has entered its final stage, bringing motorists closer to a direct, signal-free connection between the Western Express Highway and the city’s commercial district. The elevated connector is being built as an arm from the SCLR alignment and will link the western suburbs with BKC without surface signals. The link is designed to reduce journey times for commuters travelling from the western suburbs to BKC and to improve access to eastern Mumbai. By carrying through traffic above s..

Raiganj MP Seeks Bengal Only Highway Link To Siliguri

Raiganj Member of Parliament Kartik Chandra Paul met Union Minister for Road Transport and Highways Nitin Gadkari in New Delhi to press for a new stretch of national highway in North Dinajpur district. He urged approval for a Bengal-to-Bengal link that would connect National Highways 12 and 27 to allow vehicles bound for Siliguri to avoid the current route through Kishanganj in neighbouring Bihar. He also submitted a proposed alignment of the new road to the ministry for consideration. At present vehicles from Raiganj travel along NH-12 and join NH-27 at Purnia More in Dalkhola, a route that p..

Airport Kilambakkam Metro Line To Be Extended To Chengalpattu

Chennai Metro Rail (CMRL) has invited tenders for two detailed project reports that would extend its rail network to Chengalpattu in the south and extend Corridor-5 to Wimco Nagar in the north as part of a second wave of expansion beyond the operator's corridors under construction. The move signals an acceleration of planning for suburban links and interchange nodes. The larger of the two studies covers a roughly 27km extension from the planned Kilambakkam metro station to Chengalpattu under Corridor-1, Phase I. CMRL floated the tender at an estimated cost of Rs 21.6 mn. The proposed line woul..