Govt okays Rs 26k crore PLI for automotive, drone industries
New Delhi: The Union Cabinet on Wednesday approved a Rs 26,058 crore production linked incentive (PLI) scheme for auto, auto-components and drone industries to enhance India's manufacturing capabilities, Union Minister Anurag Thakur said on
The PLI scheme will incentivize the emergence of advanced automotive technologies' global supply chain in India.
Incentives worth Rs 26,058 crore will be provided to industry over five years, the minister told reporters after the Cabinet meeting.
It is estimated that over a period of five years, the PLI scheme for the automobile and auto components industry will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs,
The PLI scheme for automobile and drone industries is part of the overall announcement of PLI schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs 1.97 lakh crore.
The scheme for the auto sector envisages overcoming the cost disabilities to 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, Anurag Thakur said.
The scheme for the auto sector is open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business.
The scheme has two components - Champion OEM Incentive Scheme and Component Champion Incentive Scheme.
The Champion OEM Incentive scheme is a sales value linked' scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments, the minister said.
The Component Champion Incentive scheme is a sales value linked' scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors.
This PLI scheme for automotive sector along with the already launched PLI scheme for Advanced Chemistry Cell (Rs 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.
Further the PLI scheme for the drones and drone components industry addresses the strategic, tactical and operational uses of this revolutionary technology.
A product-specific PLI scheme for drones with clear revenue targets and a focus on domestic value addition is key to building capacity and making these key drivers of India's growth strategy.
The scheme will over a period of three years, lead to investments worth Rs 5,000 crore, an increase in eligible sales of Rs 1500 crore and create additional employment of about 10,000 jobs.
Meanwhile, the production linked incentive (PLI) scheme for the auto sector focuses on promoting the manufacturing of advanced automotive technology products like electric and hydrogen-fuel vehicles, but excludes conventional petrol, diesel and CNG segments, according to a top official.
Heavy Industry Secretary Arun Goel explained that there is no need to give benefits to ICE (internal combustion engine) segment as it has sufficient capacity in the country. The PLI scheme is incentivising only advanced automotive technologies or auto components whose supply chains are weak, dormant or non-existing.
The PLI scheme is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business.
"We are giving the incentives for new investments in new technologies," he said, adding ICE technology is already existing and "we have sufficient capacity in our country, we have strong supply chains (in that). So what we are incentivising is the supply chains which are weak, dormant or non-existent".
He added that ICE technology has been here for the last 100 years, so where is the need to incentivise it or subsidise it.