The cabinet approved Rs 26,058 crore PLI scheme for auto, auto-components and drone industry.  The government reduced the outlay for this PLI scheme to Rs 25,929 crore from Rs 57,042 crore announced in November last year.

Speaking of the decisions taken on the auto sector, Anurag Thakur said that the incentives worth Rs 26,058 crore will be provided to the industry over five years adding that the government estimates that over a period of five years, the PLI scheme for the automobile and auto components industry will lead to a fresh investment of over Rs 42,500 crore, an incremental production of over Rs 2.3 lakh crore and create additional employment opportunities of over 7.5 lakh jobs.

The PLI scheme for auto and drone industries is part of the overall announcement of PLI schemes for 13 sectors made earlier during the Budget 2021-22, with an outlay of Rs 1.97 lakh crore.

This would expand India’s domestic manufacturing capacity and export growth trajectory. The scheme will now provide a greater emphasis on technologically innovative auto components, such as automatic transmission, sensors, tyre pressure monitoring systems, battery electric vehicles, and hydrogen cells, among others, which will help exporters become more integrated into global value chains.

The scheme for the auto sector is open to existing businesses and new investors alike which are currently not in the auto business. It has two components– Champion OEM Incentive Scheme and Component Champion Incentive Scheme.

The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments, averred Anurag Thakur

The Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors.

It would also encourage businesses to invest in cutting-edge technologies and products that will help India gain a foothold in the global marketplace. Further, this scheme will improve the sector’s competitiveness and propel it to the next level of development, said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry (PHDCCI)


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