The Union Cabinet approved the Production-Linked Incentive (PLI) Scheme for Automobile and Auto Components on September 15, 2021, with a budgetary outlay of ₹25,938 crore.
This initiative aims to overcome cost disadvantages, boost domestic manufacturing of Advanced Automotive Technology (AAT) products, and create additional jobs.
By encouraging fresh investments, the scheme seeks to make India a global hub for cutting-edge automotive technologies.
Following extensive stakeholder consultations, the Ministry of Heavy Industries (MHI) notified 19 AAT vehicle categories and 103 AAT components under the scheme on November 9, 2021.
The scheme is designed to be dynamic, addressing the evolving needs of the industry while aligning with the Make in India campaign.
Domestic Value Addition (DVA) and Certification Process
To reduce imports and strengthen the domestic supply chain, scheme participants must achieve 50% Domestic Value Addition (DVA) to qualify for incentives.
A Standard Operating Procedure (SOP) has been developed, ensuring a transparent and standardized process for DVA calculations.
As of December 2024, the certification process has yielded:
- 6 Original Equipment Manufacturers (OEMs) receiving DVA certification for 66 approved variants
- 7 component manufacturers obtaining DVA certification for 22 approved variants
This structured approach ensures greater accountability and assurance for all stakeholders.
Impact: Investment, Employment, Sales, and Incentives
The PLI-Auto scheme has significantly contributed to India’s automotive manufacturing ecosystem, leading to strong growth in investments, employment, and sales, while reducing dependence on imports.
Key Achievements (as of Dec 2024)
| Parameter | Actual Reported (Cumulative) |
|---|---|
| Investment (₹ crore) | 25,219 |
| Incremental Sales (₹ crore) (Base Year: FY 2019-20) | 15,230 |
| Employment (nos.) | 38,186 |
| Incentive Disbursement (₹ crore) | 322 |
Investment: Companies have committed over ₹25,000 crore, including new production facilities and technology upgrades. Leading players like Tata Motors and Mahindra & Mahindra have ramped up EV production capacities.
Employment: The scheme has generated thousands of jobs across manufacturing, supply chain management, and R&D. New EV plants have fueled local employment in industrial hubs.
Sales Growth: The electric vehicle (EV) segment has seen a surge in sales, driven by new AAT product launches.
Incentive Disbursement: ₹322 crore has been disbursed for FY 2023-24, marking the first performance-based payout in FY 2024-25.
The PLI-Auto scheme is proving to be a game-changer, reinforcing India’s position in the global automotive supply chain while fostering a self-reliant and innovation-driven industry.
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