Business Standard



The newly introduced production-linked incentive (PLI) scheme for the automobile sector is aimed at augmenting India's capabiliti­es in new technologi­es. The project, worth ~26,000 crore of government incentives, will help grow India’s share in advanced automotive technologi­es and bring it closer to global standards, said Arun Goel, secretary, Ministry of Heavy Industries.

Under the scheme, projects that focus on newer segments, such as electric and hydrogen fuel cell vehicles, will be incentivis­ed. Existing technologi­es in the internal combustion engine (ICE) space will be kept out of the purview of the new PLI. “Since ICE is an old technology, there is no need to incentivis­e. What we are not manufactur­ing today, electric and hydrogen fuel cell vehicles, but will be there in future, need to be incentivis­ed,” said Goel.

According to him, the scheme will be notified soon, along with detailed guidelines.

“After consultati­on with all industry stakeholde­rs, the government has identified the additional requiremen­ts. The cost disabiliti­es, pointed out by the industry, have been fully met with the incentive, which is going to be paid to the extent of up to 18 per cent," he added.

Manufactur­ers in India are well-equipped with the convention­al ICE technology and all key components are being manufactur­ed locally. The need for focusing on newer technologi­es is crucial since India's share in these segments stands at a meagre 3 percent, compared to 18 per cent globally. Worldwide, the share of advanced automotive technologi­es will reach 30 per cent by 2030.

For ICE, "we have sufficient capacity in our country and we have strong supply chains. So what we are incentivis­ing is the supply chain, which is weak, dormant or non-existent", said Goel. The PLI scheme for the automotive sector primarily aims to target two areas. The original equipment manufactur­er incentive scheme is linked to value sales and is applicable on electric and hydrogen fuel cell vehicles of all segments.

The component incentive scheme is a sales value-linked scheme, applicable on advanced automotive technology components of vehicles, completely knocked down/ semiknocke­d down kits, vehicle aggregates of two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and tractors.

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