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Govt Extends PLI Scheme For Automotive Sector By 1 year

Updated: Aug 30, 2023 04:10:02pm

Govt Extends PLI Scheme For Automotive Sector By 1 year

New Delhi, Aug 30 (KNN) The Union Government has decided to extend the Rs 25,938-crore production-linked incentive scheme for the automotive sector by one year.

The extension would mean that the five-year scheme, which was originally scheduled between 2022-23 and 2026-27, will now be active until 2027-28.


The announcement was made by the Union Heavy Industries Minister Mahendra Nath Pandey on Tuesday after reviewing the performance of the PLI scheme for the automotive sector with stakeholders.

At present, the incentives are applicable under the scheme for determined sales of Advanced Automotive Technology (AAT) products (vehicles and components) manufactured in India from April 1st, 2022 onwards, for a period of five consecutive years.

Speaking to the Media, Pandey informed that the Ministry has also accepted other suggestions made by auto industry stakeholders pertaining to the scheme including quarterly disbursement of subsidies and increasing the number of agencies testing domestic value addition from two at present to four.

"We hope that the schemes will gather pace due to these measures," the minister said.

The Minister mentioned that the PLI-Auto scheme incentivizes only those eligible AAT products for which minimum 50 per cent Domestic Value Addition (DVA) is achieved and has been certified by Testing Agencies (TAs) of MHI. This criterion shall reduce imports, facilitate deep localization for AAT products and enable creation of domestic as well as global supply chain. As many as 95 companies have been admitted under the scheme that looks to promote local manufacturing of new technology products such as electric vehicles (EV) through subsidies.

The investment, as reported by the applicants (till 30th June 2023), is Rs 10,755 crore. To facilitate ease of doing business (EODB) in the scheme, MHI has published Standard Operating Procedure (SOP) for DVA certification on April 27th, 2023. Thereafter, two applicants namely Tata Motors and Mahindra & Mahindra have received DVA certification, and four more applicants have applied for DVA certification. Further, another 23 applicants are expected to apply for DVA certification by the end of September 2023.

The scheme has two parts: Champion OEM, which will make electric or hydrogen-powered vehicles, and Component Champions, which will make high-value and high-tech components.

Speaking on the occasion, Minister of State for Heavy Industries, Krishan Pal Gurjar said that the auto industry contributes 7 per cent to country’s GDP and PLI scheme will further enhance the competitiveness of the sector and will create more employment opportunities.  (KNN Bureau)


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