The government's announcement of Production Linked Incentive (PLI) scheme for auto sector will make the industry 'Aatmanirbhar', increase competitiveness and take its growth to next level, making it globally competitive, according to industry players.
The Union Cabinet on Wednesday approved PLI scheme for sectors such as auto, pharma, telecom, textile, food products and solar PV, providing Rs 2 lakh crore worth production linked incentives for 10 sectors to boost domestic manufacturing.
The Society of Indian Automobile Manufacturers (SIAM) said the industry was eagerly awaiting this scheme, while Automotive Component Manufacturers Association of India (ACMA) said the scheme will encourage the industry to become a net exporter and reduce its dependence on imports.
"We thank the government of India for echoing its confidence on the Indian automobile industry, as the industry was eagerly awaiting for this scheme to increase its competitiveness and take the growth of the sector to the next level," SIAM President Kenichi Ayukawa said in a statement.
Welcoming the announcement of PLI scheme "for enabling auto industry to be a part of the global value chain with an allocation of Rs 57,000 crore, over the course of next 5 years", he said the industry is looking forward to the details of the scheme that would be rolled out by the Ministry of Heavy Industries & Public Enterprises.
Expressing similar sentiments, ACMA President Deepak Jain said, "The announcement of the approval of the PLI Scheme for the auto and auto component sector is indeed a very welcome step to make the industry 'Aatmanirbhar' and globally competitive." He said the association is hopeful that the outlay announced will encourage the industry to become net-exporter and help reduce import dependence.
While the auto components industry exports over 25 per cent of its production, Jain said, "our ambition is to capture a significant proportion of global trade".
The Federation of Automobile Dealers Associations (FADA) said automobile industry will be the biggest beneficiary of the government's PLI scheme.
Stating that the automotive industry is a major economic contributor in India, FADA President Vinkesh Gulati said, "The PLI scheme will make the Indian automotive industry more competitive and will enhance globalisation of the Indian automotive sector." This will also improve exports and will make the production better in economies of scale, he added.
"With increasing auto production and the government giving incentives, I am sure that our principals (manufacturers) will trickle down the benefits to the end customers.
"This will therefore help in demand generation and help us in reviving the economy thus making us reach our Prime Minister's vision of a USD 5 trillion economy," Gulati said.