Cabinet clears PLI for auto sector to spur ‘green’, high-tech

What is the News?

Government of India has approved Production Linked Incentive (PLI) Scheme for Auto Industry and Drone Components.

About PLI Scheme for Auto Industry

Aim: To overcome the cost disabilities to the industry for the manufacture of Advanced Automotive Technology products in India. 

Eligibility: The scheme is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business. 

Components: The scheme has two components viz 

Champion OEM Incentive scheme: It is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments. 

Component Champion Incentive scheme: It is a ‘sales value linked’ scheme, applicable to Advanced Automotive Technology components of vehicles.

Significance of the Scheme

The scheme will encourage the industry to make fresh investments for indigenous global supply chains of Advanced Automotive Technology products. 

Read more: Production-Linked Incentive or PLI Schemes and its challenges – Explained, pointwise

About PLI Scheme on Drones and Drone Components

Aim: To provide incentives for manufacturers of Drones and Drone Components.

Duration of the Scheme: Three years starting FY 2021-22.

Under the scheme, incentives will be as high as 20% of the value addition made. The government has also agreed to keep the PLI rate constant at 20% for three years.

Note: In PLI schemes for other sectors, the PLI rate reduces every year.

Source: This post is based on the following articles 

  • “Cabinet clears PLI for auto sector to spur ‘green’, high-tech” published in The Hindu on 16th September 2021.
  • ‘Cabinet approves Rs 26,000-crore PLI scheme for auto sector’ published in TOI on 16th September 2021.
  • “The Government has approved the Production Linked Incentive (PLI) Scheme for Auto Industry and Drone Industry to enhance India’s manufacturing capabilities” published in PIB on 16th September 2021.
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