Govt to disburse incentives under PLI Auto scheme from Q4FY25

The government expects to start disbursing the incentives under the production-linked incentive (PLI) scheme for automobile and auto components in the January-March quarter of the current financial year 2025, according to the Ministry of Heavy Industries.

The Rs 25,938 crore output-linked incentive scheme was launched in 2021 to boost domestic manufacturing of advanced automotive technology (AAT) products and attract investments in the automotive manufacturing value chain.

Initially, the incentives were applicable on determined sales value from the financial year 2022-23 for five consecutive financial years till 2026-27. However, the scheme was later amended to extend the tenure by one year to March 31, 2028.

Incentives are applicable on the “determined sales value” which is defined as the incremental eligible sales of a particular year over the base year. The incentives are scheduled to be disbursed from 2024-25 to 2028-29. The first incentive disbursement is anticipated in 2024-25, the ministry said.

The PLI Auto scheme has two components – the Champion OEM incentive scheme for battery electric and hydrogen fuel cell vehicles in all segments, and the component champion incentive scheme for hi-tech and hi-value components. 
Incentives are offered in the range of 13% to 18% for components of electric vehicles and hydrogen fuel cells, while other AAT products get incentives between 8% and 13%. The guidelines mandate that at least 50% of a product's value be generated within the country.

The government has approved 18 companies including Tata Motors, M&M, Maruti Suzuki, Toyota Kirloskar, Hyundai Motor India, Kia India, Piaggio, Eicher, Hero MotoCorp, Bajaj Auto and Ola Electric, to participate in the scheme under the Champion OEM category.

Under the Component Champion category, 67 companies, including Sona BLW Precision, Delphi-TVS Technologies, Bharat Forge, Bosch, Dana Ananda India, Lumax Auto, Minda Corp, Aptiv Components, Maruti Suzuki, Ceat, Hero Cycles, have got approval.

The total proposed investment under the scheme is estimated at Rs 67,690 crore and it has attracted an investment of Rs 20,715 crore as of September 2024, leading to incremental sales of Rs 10,472 crore.

Tata Motors and Mahindra & Mahindra have submitted incentive claims of Rs 142.13 crore and Rs 104.08 crore, respectively, for determined sales in the financial year 2024 and the claims have been approved by the government.

Minister for Heavy Industries HD Kumaraswamy noted that the applicants are achieving the required 50% domestic value addition (DVA), and expects more applicants who have obtained DVA certificates for at least 50% to will soon start production of automobiles and auto components in India.

“The government of India is committed to the "Make in India" initiative and Atmanirbhar Bharat, aligning with the vision of Prime Minister Shri Narendra Modi. This commitment positions India to establish its name globally in the automotive sector,” Kumaraswamy said.

“The PLI Auto scheme and other schemes of the Ministry like PM EDRIVE, PLI Advanced Chemistry Cell, Payment Security mechanism etc are expected not only to boost local manufacturing but also to enhance India's competitiveness in the global automotive market.” 

READ MORE: Tata Motors, Mahindra claim Rs 246 crore as incentives under PLI Auto scheme