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What is the News?
The government of India has issued notification regarding Production Linked Incentive (PLI) Scheme for Automobile & Auto components.
What is the Production Linked Incentive (PLI) Scheme for Automobile & Auto components?
Aim: To overcome the cost disabilities of the industry for the manufacture of Advanced Automotive Technology products in India.
Key Features of the Scheme
Eligibility: The scheme is open to existing Automotive companies as well as new Non-Automotive investor companies (who are currently not in the automobile or auto component manufacturing business).
Duration: The scheme will be implemented over a period of five years starting from FY 2022-2023.
Components: The scheme has two components viz
Champion OEM Incentive scheme: It is a ‘sales value linked’ scheme, applicable to Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments.
Component Champion Incentive Scheme: It is a ‘sales value linked’ scheme, applicable on pre-approved Advanced Automotive Technology components of all vehicles. Pre-approval of the eligible products will be done by Testing Agency.
Base year: Financial Year 2019-20 shall be treated as the Base Year for calculation of Eligible sales. An approved applicant shall be eligible for benefits for 5 consecutive Financial Years.
Any eligible product will be incentivized only for once – Component level or Vehicle level.
| Read more: Production-Linked Incentive or PLI Schemes and its challenges – Explained, pointwise |
Minimum 50% domestic value addition will be required to avail incentives under the scheme.
The incentive will be applicable on the Determined Sales Value, which is defined as the incremental eligible sales of a particular year over the base year.
Source: This post is based on the article ”Government Notifies PLI Scheme for Automobile & Auto components” published in PIB on 25th September 2021.
