The scheme for the automotive sector, along with the already launched PLI of Rs 18,100 crore for advanced chemistry cell and Faster Adaption of Manufacturing of Electric Vehicles (FAME) scheme of Rs 10,000 crore, will give a big boost in the manufacturing of Electric Vehicles.
The Union Cabinet has approved production-linked incentive (PLI) schemes for auto and drone industries, with a budegetary outlay of Rs 26,058 crore over five years, to encourage local production.
“It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to a 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. Further, this will increase India’s share in global automotive trade,” the government said in a release.
The scheme for the automotive sector, along with the already launched PLI of Rs 18,100 crore for advanced chemistry cell and Faster Adaption of Manufacturing of Electric Vehicles (FAME) scheme of Rs 10,000 crore, will give a big boost in the manufacturing of Electric Vehicles. This scheme will also benefit existing automotive companies and new investors.
The PLI scheme comes as a relief, as it will help overcome cost disabilities for manufacturing Advanced Automotive Technology products in India. This will also attract investments for indigenous global supply chain of Advanced Automotive Technology products, the government said.
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 Component Champion Incentive scheme is also a ‘sales value linked’ scheme, and is applicable on advanced automotive technology components of vehicles.
“The earlier push through amendments to FAME II and added revisions by various states have been absolute game-changers in bringing down the prices of EVs. This will further help bring down the cost of manufacturing thereby benefiting the consumer, the industry and the environment,” said Naveen Munjal, managing director at Hero Electric.
This will encourage and push adoption of cleaner mobility and technologies, and the sector is poised to grow exponentially from here on, he added.
Additionally, PLI for drones and drone components has also been announced and is expected to attract investments of over Rs 5,000 over three years. It is expected to increase eligible sales of Rs 1,500 crore and create additional employment of about 10,000 jobs.
As part of the Union Budget 2021-22, the PLI scheme for automobile industry and drone industry is part of the overall announcement of PLI schemes for 13 sectors. These schemes have an outlay of Rs 1.97 lakh crore. The minimum additional production in India, with these overall incentive schemes is expected to be around Rs 37.5 lakh crore over five years.
https://cfo.economictimes.indiatimes.com/news/govt-approves-pli-schemes-for-auto-drone-industries-scheme-to-lead-fresh-invest-of-rs-42500-crore-in-auto-sector/86231917
