Without DVA, OEMs cannot claim the Rs 3,500 crore allocated to the PLI scheme for this year
23 Aug 2024 | 4864 Views | By Amit Vijay M
The last few days have seen announcements from OEMs like Ola Electric and Bajaj Auto about their products receiving domestic value addition certificates under India's ambitious production linked incentive scheme. However, nearly one third of the models for which such certificates were applied are yet to receive them.
The ...
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The last few days have seen announcements from OEMs like Ola Electric and Bajaj Auto about their products receiving domestic value addition certificates under India's ambitious production linked incentive scheme. However, nearly one third of the models for which such certificates were applied are yet to receive them.
The Government of India, in the recently presented Union Budget, hiked the allocation for the automotive industry's production-linked incentive scheme to Rs 3,500 crore for the currrent year from the Rs 483.77 crore disbursed last year.
However, to get the money, Automotive Research Association of India (ARAI) has to certify that the products manufactured under the scheme contain at least 50% value addition in India. In other words, the value of imported components and services should be less than 50% of the final value of the product.
The PLI scheme offers central government subsidies of nearly Rs 26,000 crore to manufacturers of automobiles and auto parts between April 2023 and March 2027. Six auto manufacturers, namely Tata Motors, Mahindra & Mahindr, Ola Electric, Bajaj Auto, TVS Motor and Either Motors, have applied for the funds, which are disbursed in proportion to a preapproved plan of investment and sales.
So far, out of the 74 vehicles submitted for DVA certification, only 50 models have got them, with the others being under evaluation. The highest number of applications submitted are from Tata Motors (27 models), followed by M&M (23) and Bajaj Auto (13) (see chart).
| Applicant Name | Applied | Approved | In Process |
| Mahindra and Mahindra Ltd | 23 | 16 | 7 |
| Tata Motors | 27 | 15 | 12 |
| Ola Electric | 5 | 4 | 1 |
| Bajaj Auto | 13 | 13 | 0 |
| TVS Motor Co | 5 | 2 | 3 |
| Eicher Motors | 1 | - | 1 |
| Total | 74 | 50 | 24 |
MHI sources speaking to Autocar Professional said authorities at the Automotive Research Association of India (ARAI), which looks into compliance with the DVA norms, are working overtime to ensure that the application process time of 4 months to award the certificates is met stringently.
“We are keen to get this done in less than three months, but the nature of the certification is such that we have to ensure that each OEM complies with all the norms, which sometimes takes some extra time,” informed Reji Mathai, Director at ARAI, during a recent interaction.
Ola Electric and Bajaj Auto have already received DVA certification for approximately 4 and 13 products, respectively, while Mahindra & Mahindra has received approval for 16.
In the case of TVS Motors, the firm has applied for five products, with the government approving two of them, while Eicher Motors, which has applied for one such product under the scheme, has yet to receive the government's approval.
The recent economic survey presented in the Lok Sabha has also indicated that the Auto PLI scheme has attracted total investments of close to 67,690 crore, with the capital investment under the scheme reaching Rs 14,043 crore till March 2024
The government's Auto PLI scheme is divided into two categories: the Champion OEM Incentive Scheme and the Component Incentive Scheme.
In the component scheme, Sona Comstar has received government approval for products such as wheel rims integrated with hub motors and traction motors.
In the case of Toyota Kirloskar Auto Parts and Delphi TVS technologies, the former has the mandate for trans-axles for electrified vehicles, while Delphi TVs has managed to get approval for pumps for CRDI operating at 1800 bar and above.