In an effort to enhance India's manufacturing capabilities, Union Minister Anurag Thakur said in a statement Wednesday that the Cabinet on Wednesday approved a production link incentive (PLI) scheme worth Rs 26,058 crore for the auto, auto components, and drone industries. It will incentivize the emergence of advanced automotive technologies' global supply chain in India.
Incentives worth Rs 26,058 crore will be provided to industry over five years, the minister told reporters after the Cabinet meeting.
It is estimated that over a period of five years, the PLI scheme for the automobile and auto components industry will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs, Thakur said.
In the Union Budget 2021-22, PLI schemes for 13 sectors were announced, which will undertake an outlay of Rs 1.97 lakh crore. The PLI scheme for automobiles and drones is part of this package.
The scheme for the auto sector envisages overcoming the cost disabilities to the industry for the manufacture of advanced automotive technology products in India. The incentive structure will encourage industry to make fresh investments for the indigenous global supply chain of Advanced Automotive Technology products, Thakur said.
The scheme for the auto sector is open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business. 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 on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments, the minister said.
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.
This PLI scheme for automotive sector along with the already launched PLI scheme for Advanced Chemistry Cell (Rs 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.
This PLI scheme further addresses the strategic, tactical and operational uses of drones and drone components. In order for India to become a worldwide leader in drones, a product-specific PLI scheme aimed at building capacity and focusing on domestic value addition is essential.
Through this scheme, over a period of three years, investments of Rs 5,000 crores will be made, eligible sales will increase by Rs 1500 crores, and additional job opportunities will be created totaling about 10,000 jobs.
Image source: ANI