The government has announced an extension of the production-linked incentive (PLI) scheme for the automobile and auto components sector, now valid until March 31, 2028. Valued at Rs 25,938 crore, this output-linked incentive initiative aims to stimulate the domestic manufacturing of advanced automotive technology products and attract investments across the automotive manufacturing value chain.
Originally, the incentives were applicable based on determined sales value from the financial year 2022-2023 for a period of five consecutive financial years until 2026-2027. With the amendment, the incentives will now be applicable for five consecutive financial years from 2023-2024 to 2027-2028, with incentive disbursement starting in the financial year 2024-2025.
The scheme comprises two components: the Champion OEM incentive scheme for battery electric and hydrogen fuel cell vehicles and the Component Champion incentive scheme for high-tech and high-value components. Incentives are granted for products with a minimum domestic value addition of 50%.
Eighteen companies, including Maruti Suzuki, Tata Motors, Hero MotoCorp, Bajaj Auto, and Ola Electric, have received approval under the Champion OEM category. Additionally, 67 companies have been approved under the Component Champion category of the scheme.
The amendments specify that if an approved company fails to meet the threshold for an increase in determined sales value over the first year’s threshold, it will not receive incentives for that year. However, the company remains eligible for benefits in the subsequent year if it meets the threshold, calculated based on a 10% year-on-year growth over the first year’s threshold, according to the Ministry of Heavy Industries.
