PLI scheme to allow faster growth in Indian automobile sector

Sundram Fasteners Limited (SFL) told the media that the Performance Linked Incentive (PLI) Scheme in the automobile industry would enable it to move to higher value-added products. According to a report for FY22, the company said PLI was expected to trigger faster growth and help India leapfrog over parts of the global supply chain and promote employment opportunities. The electric vehicle (EV) segment witnessed significant growth this year. With the support from public investment, the PLI scheme was expected to promote capital expenditure by the private sector. According to SFL, the coming year is poised for a hike in private sector investment with a robust financial system to support the economy’s revival. The Covid-19 pandemic caused a worldwide surge in inflation, and SFL the trend could linger for years, with the increased steel prices to continue to impact margins in the first half of FY23. The company said that the Indian automotive industry estimates to grow 10% during FY23, while tractors may expand in high single-digits. The Indian economy was poised to grow at 7.9% in FY23 upon broad-basing on economic activity and monsoon. The factors can be curtailed because of slowing global economies, the Russia-Ukraine war and higher commodity prices, especially crude oil. These factors might put the supply chain at a severe threat leading to a drop in volumes. Image Source Also read: India aims to be 3rd largest automotive industry globally by 2030