Govt May Clear Pending Auto PLI Applications From Chinese-Linked Companies

New Delhi, Sep 23 (KNN) The government is likely to consider pending applications under the automobile and auto components production-linked incentive (PLI) scheme from companies with Chinese investment, potentially clearing the way for benefits to JSW MG Motor India and two Tata AutoComp Systems ventures.

Existing PLI applications that have subsequently received foreign direct investment (FDI) approvals will be considered. However, the government is not planning to open a fresh application window under the scheme, reported Economic Times.

Three Chinese-Linked Auto Ventures

JSW MG Motor India, a joint venture between JSW Group and China’s SAIC Motor, sells MG-branded passenger vehicles in India.

Tata AutoComp Systems has two relevant ventures, TACO Prestolite, which develops and manufactures electric drivetrains and traction motors with Prestolite Electric Beijing, and TACO Air International, an automotive air-conditioning manufacturer partnered with Air International Shanghai.

Pending Chinese FDI approvals had earlier delayed processing of some PLI applications. Few applications, including one from Dixon Technologies’ venture with a Chinese partner for electronic components, have already received PLI approval.

India-China Ties Ease

The development comes amid improving India-China economic and diplomatic engagement. President Xi Jinping recently visited India for the BRICS Summit and held bilateral talks with Prime Minister Narendra Modi.

Relations had deteriorated following the 2020 Galwan Valley clashes, after which India introduced prior government approval for FDI from countries sharing a land border with India.

New Delhi has subsequently introduced guidelines aimed at expediting approval of Chinese-linked FDI proposals, while the two countries have also increased official-level engagement and agreed to resume direct flights.

Rs 25,938 Crore Auto PLI Scheme

The automobile and auto components PLI scheme was approved in September 2021 with a Rs 25,938 crore budgetary outlay. Incentives are linked to parameters including incremental sales, investment and domestic value addition.

Investments under the scheme have now crossed Rs 45,000 crore, while the government is expected to disburse around Rs 4,000 crore under the scheme in the current fiscal.

The FY27 Budget has allocated Rs 5,939.87 crore for the scheme, nearly three times the Rs 2,091.26 crore allocated in the previous fiscal.

(KNN Bureau)