Notification issued for PLI Scheme for auto industry

New Delhi

The government has issued notification regarding Production Linked Incentive (PLI) Scheme for automobile & auto components. The scheme and its Guidelines have been notified in the Gazette of India on Sept 23, 2021. Earlier, government approved the Production Linked Incentive (PLI) Scheme for automobile and auto component industry on September 15, 2021.

The PLI Scheme for the auto sector envisages to overcome the cost disabilities of the industry for the manufacture of Advanced Automotive Technology products in India. The incentive structure will encourage industry to make fresh investments for the indigenous global supply chain of Advanced Automotive Technology products.

It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investments of over Rs 425 billion and will create additional employment opportunities for over 7.5 lakh jobs. Further, this will increase India’s share in the global automotive trade.

The PLI Scheme for the Auto sector is open to existing Automotive companies as well as new Non-Automotive investor companies. The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The scheme for Automobile and auto components will be implemented over a period of five years starting from FY 2022-2023.

 An approved applicant shall be eligible for benefits for 5 consecutive Financial Years. Financial Year 2019-20 shall be treated as the Base Year for calculation of Eligible sales.

An existing automotive company or its Group company(ies)will need to meet the Basic Eligibility criteria to receive incentives. In case the company fails to meet the cumulative domestic investment condition in any given year, it will not receive any incentive for that year
even if the threshold for Determined sales value is achieved. However, it will still be eligible to receive the benefits under the scheme in the
following years if it meets the cumulative domestic investment condition defined for that year.

Some of the components of the scheme are:

? The list of technologies can be modified by MHI from time to time

Minimum 50% domestic value addition will be required and Phased Manufacturing Programme similar to FAME-II Scheme will be followed

Pre-approval of eligible product will be done by the Testing Agency of MHI as per the guidelines issued by MHI from time to time.

Any eligible product will be incentivized only for once – Component level or Vehicle level.

An additional incentive of 2% will also, be applicable to support high growth achievers