The Indian government’s Production-Linked Incentive (PLI) Scheme for Automobile & Auto Components, launched on September 15, 2021, has been making waves in the industry. With a substantial budgetary outlay of ₹25,938 crore, the scheme aims to encourage domestic manufacturing of Advanced Automotive Technology (AAT) products, helping India overcome cost disadvantages and boost employment.
A Boost for Indigenous Manufacturing
The scheme aligns with the Make in India initiative and focuses on increasing local production of automotive components while reducing dependency on imports. Under the PLI Auto scheme, 19 categories of AAT vehicles and 103 AAT components have been identified, offering businesses incentives for manufacturing these products in India.
To qualify for incentives, applicants must meet a Domestic Value Addition (DVA) criterion of 50%. This ensures significant localization and integration into both domestic and global supply chains.
Strong Impact on Investments, Employment, and Sales
Since its inception, the PLI Auto scheme has shown remarkable progress across various key parameters:
1. Investments
By December 2024, companies participating in the scheme have invested over ₹25,000 crore in new production facilities and technology upgrades. Major industry players like Tata Motors and Mahindra & Mahindra have committed significant resources to enhance their EV (electric vehicle) production capacity.
2. Employment Generation
With increasing manufacturing activity, the scheme has created thousands of jobs in manufacturing, supply chain management, and R&D (Research & Development). The establishment of new EV production plants has particularly contributed to localized employment in key manufacturing hubs.
3. Sales Growth
The scheme has played a pivotal role in driving sales growth, particularly in the EV segment. The introduction of new models and enhanced production capabilities have led to increased adoption of electric and hybrid vehicles, benefiting both manufacturers and consumers.
4. Incentive Disbursement
The first performance year for disbursements under the scheme was FY 2023-24, with ₹322 crore distributed to eligible companies in FY 2024-25.
Key Reported Figures (As of Dec 2024)
| Parameter | Reported Data (Cumulative) |
|---|---|
| Investment (₹ crore) | 25,219 |
| Incremental Sales (₹ crore) | 15,230 |
| Employment (No. of Jobs) | 38,186 |
| Incentive Disbursement (₹ crore) | 322 |
The PLI Scheme for Automobile & Auto Components has proven to be a game-changer for the Indian automotive industry. By encouraging local production, generating employment, and supporting EV growth, it is setting the stage for India’s emergence as a global automotive manufacturing hub. As more companies invest in sustainable and advanced technologies, the scheme is expected to drive even greater progress in the coming years
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