PLI Scheme for Automobile and Auto Components
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Production Linked Incentive (PLI) Scheme for Automobile and Auto Components
Updated on March 06, 2025 01:44:52 PM
The Production Linked Incentive (PLI) Scheme for Automobile and Auto Components has the intent to make India the global hub of automotive manufacturing with emphasis on producing electric vehicles and key automotive components. PLI Scheme for Automobile and Auto Components guarantees incentives to the local manufacturing companies encouraging growth hence offering affordable production to encompass the escalating local and global demand. The PLI Scheme for Automobile and Auto Components provides advantages in terms of reducing reliance on imports and improving the competitiveness of the Indian automotive industry by promoting technology advancement and supply chain improvement. The PLI Scheme for Automobile and Auto Components also draws both domestic and foreign investments, shapes the development of new environmentally friendly technologies in the field of transport and contributes to the formation of India as one of the leaders of the future transport industry.
What is the PLI Scheme for Automobile and Auto Components?
The Production Linked Incentive (PLI) Scheme for Automobile and Auto Components is aimed at enhancing India’s manufacturing ecosystem in next gen automobile technology relevant to green and smart mobility solutions. The manufactured components are envisaged to be exported from the country by PLI Scheme for Automobile and Auto Components, thus decreasing reliance on imports and making India a hub for manufacturing and exportation of high tech automobile components and EVs. The PLI Scheme for Automobile and Auto Components encourages companies to use advanced technologies and also to adopt international standards. Further, PLI Scheme for Automobile and Auto Components encourages formation of new generation mobility solutions, employment, and makes India a more strategic player in the global automobile industry, which helps in making transformations towards sustainable and innovative transportation in India.
Benefits of PLI Scheme for Automobile and Auto Components
The Production Linked Incentive (PLI) Scheme for Automobile and Auto Components provides key advantages to India’s automotive manufacturing sector:
- Strengthen Infrastructure: PLI Scheme for Automobile and Auto Components supports financial investment for creating facilities, supply chain, and logistics infrastructure of the mechanical industry.
- Attract Investments: The PLI Scheme for Automobile and Auto Components encourages investments from domestic as well as international investors to build a competitive automotive ecosystem in India.
- Enhance Export Competitiveness: The PLI Scheme for Automobile and Auto Components targets advanced automotive technology and innovation.
- Promote Domestic Manufacturing: The PLI Scheme for Automobile and Auto Components helps to increase the production of automobile parts, primarily in the electric and environmentally friendly transportation industries.
- Job Opportunities: The PLI Scheme for Automobile and Auto Components encourages employment in manufacturing, research and development, and component manufacturing.
Eligibility for PLI Scheme for Automobile and Auto Components
The following eligibility criteria must be met by the applicant company or its group companies to qualify for the PLI Scheme for Automobile and Auto Components:
1. Existing Automotive Companies (Auto OEM & Auto-Component Manufacturers)
| Eligibility Criteria | Auto OEM | Auto-Component |
|---|---|---|
| Global Group Revenue (Automotive/Auto Component Manufacturing) | Minimum ₹ 10,000 crore | Minimum ₹ 500 crore |
| Global Investment in Fixed Assets (Gross Block) | ₹ 3,000 crore | ₹ 150 crore |
- Group Company Definition: Two or more enterprises that can:
- Exercise 26% or more of voting rights in another enterprise, or
- Appoint more than 50% of the Board of Directors in another enterprise (as defined in the FDI Policy Circular of 2020).
Note: Eligibility based on audited financial statements for the year ending March 31, 2021. The applicant must meet all eligibility criteria to qualify for benefits under the PLI Scheme for Automobile and Auto Components.
2. New Non-Automotive Investor Companies
| Eligibility Criteria | New Non-Automotive Investor Companies |
|---|---|
| Global Net Worth | ₹ 1,000 crore (based on audited financial statements for FY ending March 31, 2021) |
| Committed Investment in India (Over 5 Years) | As per Minimum New Domestic Investment Conditions (detailed in the scheme) |
- New Non-Automotive companies must present a clear business plan for investing in India and generating revenues from Advanced Automotive Technology (AAT) vehicles or AAT components manufacturing.
Conclusion
The Production Linked Incentive (PLI) Scheme for Automobile and Auto Components sector is intended to develop India as an ideal destination for automobile manufacturing and with an emphasis on electric vehicles and complex components. As the PLI Scheme for Automobile and Auto Components encourages production within India, minimizes the dependence on imported cars and also encourages car manufacturers to develop new technologies, it has helped make India more competitive in the global automotive sector. The PLI Scheme for Automobile and Auto Components also applies to domestic and international investments, strengthens the manufacturing environment, and creates employment. The PLI Scheme for Automobile and Auto Components also supports development of balanced and sustainable transport systems hence making India a strategic area of focus for future transport systems. The new coking coal mines are approved under the PLI Scheme for Automobile and Auto Components where through incentives, growth, innovation, and export competitiveness are promoted.
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Frequently Asked Questions
What is the PLI Scheme for Automobile and Auto Components?
The PLI Scheme for Automobile and Auto Components targets to build India as a manufacturing powerhouse for automobiles and auto components especially EVs & important automotive components.
What are the benefits of the PLI Scheme for Automobile and Auto Components?
The PLI Scheme for Automobile and Auto Components offers rewards for increasing the levels of domestic manufacturing, decreasing import dependence, and promoting the development of new technology for the automotive industry.
What is the total incentive outlay for the PLI Scheme for Automobile and Auto Components?
The cumulative expenditure on the incentives for the PLI Scheme for Automobile and Auto Components is ₹25,938 crore over a period of five financial years till 2028-29.
Can foreign companies apply for the PLI Scheme for Automobile and Auto Components?
Yes, both domestic and foreign companies can apply for the PLI Scheme for Automobile and Auto Components if they meet the eligibility criteria and comply with the scheme’s requirements for investment and technological advancements.
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