+
Auto PLI Drives Domestic e2W Growth, Raises Export Concerns
ECONOMY & POLICY

Auto PLI Drives Domestic e2W Growth, Raises Export Concerns

The Centre for Digital Economy Policy Research reported that the auto production-linked incentive scheme has accelerated production scale among approved electric two-wheeler manufacturers but has materially altered competitive dynamics, with the cost advantage largely used to capture domestic market share rather than to build export-ready platforms. The think tank warned that the current design favours scale at the expense of innovation and may marginalise companies that invested heavily in early technological development.

The report found that non-PLI electric two-wheeler manufacturers experienced a sharp market contraction, with growth falling from 407 per cent in FY22 to minus 33 per cent in FY24 and further to minus 11 per cent in FY25 following the rollout of the scheme. It noted that PLI-approved original equipment manufacturers benefit from an estimated 13-16 per cent cost advantage, enabling more aggressive pricing strategies and faster capacity expansion that have distorted market structure.

The analysis highlighted a stark contrast in export performance, with 77 per cent of India's electric two-wheeler exports driven by non-PLI models and PLI-approved models accounting for less than one-fourth of total exports despite the cost edge. The centre cautioned that a policy focus solely on scaling production risks undermining long-term competitiveness and could lead to the loss of key traditional export markets such as Nepal and parts of Latin America and Africa to Chinese manufacturers like Yadea and Sunra.

The report recorded that by December 2025 only Rs 23,219.4 mn had been disbursed against a cumulative target of Rs 37,540 mn, with only nine per cent of the total outlay disbursed against an expected 14.47 per cent. It recommended opening a targeted window for innovation-led original equipment manufacturers that demonstrate strong localisation depth by complying with the PM E-DRIVE Phased Manufacturing Programme, adopting a first-come-first-serve mechanism to prevent inactive players from hoarding approvals and fiscal space, and conducting periodic performance reviews to exit non-performing beneficiaries and reallocate fiscal space.

The Centre for Digital Economy Policy Research reported that the auto production-linked incentive scheme has accelerated production scale among approved electric two-wheeler manufacturers but has materially altered competitive dynamics, with the cost advantage largely used to capture domestic market share rather than to build export-ready platforms. The think tank warned that the current design favours scale at the expense of innovation and may marginalise companies that invested heavily in early technological development. The report found that non-PLI electric two-wheeler manufacturers experienced a sharp market contraction, with growth falling from 407 per cent in FY22 to minus 33 per cent in FY24 and further to minus 11 per cent in FY25 following the rollout of the scheme. It noted that PLI-approved original equipment manufacturers benefit from an estimated 13-16 per cent cost advantage, enabling more aggressive pricing strategies and faster capacity expansion that have distorted market structure. The analysis highlighted a stark contrast in export performance, with 77 per cent of India's electric two-wheeler exports driven by non-PLI models and PLI-approved models accounting for less than one-fourth of total exports despite the cost edge. The centre cautioned that a policy focus solely on scaling production risks undermining long-term competitiveness and could lead to the loss of key traditional export markets such as Nepal and parts of Latin America and Africa to Chinese manufacturers like Yadea and Sunra. The report recorded that by December 2025 only Rs 23,219.4 mn had been disbursed against a cumulative target of Rs 37,540 mn, with only nine per cent of the total outlay disbursed against an expected 14.47 per cent. It recommended opening a targeted window for innovation-led original equipment manufacturers that demonstrate strong localisation depth by complying with the PM E-DRIVE Phased Manufacturing Programme, adopting a first-come-first-serve mechanism to prevent inactive players from hoarding approvals and fiscal space, and conducting periodic performance reviews to exit non-performing beneficiaries and reallocate fiscal space.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

JSW Greentech Launches Ampstar Electric CV Brand

JSW Greentech has launched Ampstar, its electric commercial vehicle brand, with a first-phase investment of Rs. 25 bn. The initiative marks JSW Group’s entry into India’s electric truck and bus market, with manufacturing planned at a 90-acre greenfield plant in Chhatrapati Sambhajinagar, Maharashtra. The facility will have annual capacity for 15,000 vehicles, comprising 10,000 electric buses and 5,000 electric trucks. The company has showcased a 55-tonne electric tractor-trailer and a 12-metre electric bus, with commercial production expected to begin within 30 days after final approvals. ..

Next Story
Infrastructure Urban

IIT Madras and Bechtel India Launch Rs. 33 mn Construction Robotics Lab

The Indian Institute of Technology Madras has launched a Rs. 33 mn robotics laboratory on its campus in collaboration with Bechtel India. The facility is intended to accelerate research, innovation and industry applications in robotics and automation for the construction and infrastructure sectors, while creating opportunities for students and researchers. The laboratory was inaugurated on 22 September 2026. The partnership was formalised through a memorandum of understanding signed by Prof. Ashwin Mahalingam, Dean of Alumni and Corporate Relations at IIT Madras, faculty members Prof. T. Asoka..

Next Story
Technology

KEONICS Plans Technology Hubs in Shivamogga, Mangaluru and Mysuru

Karnataka Electronics Development Corporation (KEONICS), a state government undertaking, is expanding its technology infrastructure and digital services beyond Bengaluru, with new projects planned in Shivamogga, Mangaluru and Mysuru. The initiatives are intended to strengthen regional technology ecosystems, create employment opportunities and attract investment across the state. KEONICS Chairman Sharath Bachegowda said the projects would use public-private partnership and design, finance, build, operate and transfer models to encourage private-sector participation. In Shivamogga, an IT Park An..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code