Chennai
The Production-Linked Incentive (PLI) scheme of Rs 259.38 billion has the potential to make India an export hub in the global auto supply chain and increase cost competitiveness, according to ICRA.
The Union ministry of heavy industries estimates that the scheme has potential to bring fresh investments of over Rs 425 billion. As per ICRA, the scheme aims for a future-ready and globally competitive Indian auto sector, by fast-tracking investments in technology and components.
The PLI incentives are sales-linked and are expected to range from 13-18% on determined sales values for OEMs and 8-13% of determined sales values for auto component manufacturers. An additional 5% is to be given for manufacturing components for battery electric vehicle and hydrogen fuel cell vehicles. It will be effective from FY2023 for five years.
Vinutaa S, assistant vice-president and sector head, ICRA Limited, said that, it will increase localisation, accelerate investments towards a local EV ecosystem and has the potential to make India an export hub in the global auto supply chain. The scheme is also likely to attract foreign investments into India, capitalizing on global economies de-risking their supply chains.
The automotive sector has been one of the key beneficiaries of the PLI scheme. Along with the FAME-II, the State EV policies (on the demand side) and earlier announced PLI for ACC batteries (on the supply side), the current PLI scheme will enable India to switch from fossil-fuel based automobile to green transportation.
Source: The Times Of India
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