As many as 20 companies including, major four-wheeler manufacturers, such as Hyundai, Suzuki, Ford, Kia, Mahindra and Tata Motors, and top two-wheeler makers Hero MotoCorp, Bajaj Auto and TVS Motor have been approved for the Production Linked Incentive (PLI) Scheme for the automobile sectors.
The production-linked incentive (PLI) scheme for the automobile sector is expected to create at least 7.5 lakh jobs in the country, the Ministry of Heavy Industries Secretary Arun Goel said.
“The Scheme has been a huge success in terms of overwhelming response received with a proposed investment of Rs 45,016 cr from approved applicants”, the Ministry of Heavy Industries said in a statement on February 11, 2022. Apart from Indian business groups, the approved applicants for the Champion OEM Incentive Scheme include groups from countries such as the Republic of Korea, the US, Japan, France, Italy, the UK and the Netherlands.
Production Linked Incentive (PLI) Scheme
The PLI scheme, commonly abbreviated as Production Linked Incentive Scheme, is an initiative launched by the Government of India to not only encourage foreign companies to find workforce in the country and thereby create employment but also encourage domestic and local production to create micro-jobs.
Champion OEM Incentive Scheme and Component Champion Incentive Scheme
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 to all segments of Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles. The Component Champion Incentive Scheme is a ‘Sales Value Linked Scheme’, applicable to advanced automotive technology components of vehicles, fully knocked down/semi-knocked down kits, two-wheelers, three-wheelers, commercial vehicles, passenger vehicles and tractors.
Champion OEM (Except 2W & 3W)
Tata Motors Limited
Ashok Leyland Limited
Eicher Motors Limited
Mahindra & Mahindra Ltd.
Suzuki Motor Gujarat Private Limited
Ford India Private Limited
Hyundai Motor India Limited
Kia India Private Limited
PCA Automobiles India Private Limited
Pinnacle Mobility Solutions Private Limited
Champion OEM 2W & 3W
Hero MotoCorp Ltd.
Bajaj Auto Limited
TVS Motor Company Limited
Piaggio Vehicles Private Limited
New Non-Automotive Investor (OEM)
Ola Electric Technologies Private Limited
Booma Innovative Transport Solutions Private Limited
Elest Private Limited
Axis Clean Mobility Private Limited
Hop Electric Manufacturing Private Limited
Powerhaul Vehicle Private Limited
Ford Motor to return to India
US-based carmaker Ford has been included in the Centre’s PLI scheme. Ford India, which announced its exit from India back in September, has been selected among 20 carmakers under the ‘Champion OEM Incentive Scheme’.
Despite halting production of its cars in India, the inclusion of Ford Motor in the Centre’s PLI scheme indicates better business opportunities, ease of doing business and good government support for Make in India.
Benefits of PLI Scheme
The Production Linked Incentive (PLI) Scheme for the automobile sector offers a financial incentive of up to 18 per cent to promote domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Incentives are applicable for determining sales of products manufactured in India from April 1, 2022, for five consecutive years.
Incentives are available to existing automotive companies as well as new investors. Vehicles powered by conventional internal combustion engines running on petrol, CNG, diesel and ethanol are also eligible for any new-age technologies to be brought into the automotive ecosystem.
The Automotive PLI scheme is in addition to the Rs 18,100 crore Advanced Chemistry Cell and Rs 10,000 crore Faster Adaption of Manufacturing of Electric vehicles (FAME) schemes. These “will enable India to leapfrog from conventional fossil fuel-based automobile transport system to environmentally cleaner, sustainable, advanced and more efficient electric vehicle-based system,” the government had said.
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