The Union Cabinet on Wednesday cleared Rs 26,058 crore worth new PLI (Production-Linked Incentive) scheme for the auto sector, auto-components and drone industries to enhance India’s manufacturing capabilities, Union Minister Anurag Thakur said on Wednesday. The scheme would endow special focus on Electric Vehicles.
Earlier, an outlay of Rs 1.97 lakh crore was made for PLI scheme spanning 13 sectors in budget 2021-22.
Industry reacts favorably to PLI scheme
Girish Wagh, Executive Director, Tata Motors
We at Tata Motors are much encouraged with the new Production-Linked Incentive (PLI) scheme announced for the auto sector. This scheme is both progressive and transformational. It reiterates India’s holistic commitment to a sustainable future and accelerates the country’s progress towards green mobility. Several meaningful incentives have been offered across the entire value chain engaged in manufacturing of battery powered electric vehicles and hydrogen fuel cell, as well as their supporting infrastructure and exports. Encouraging production of auto components using advanced technologies will boost localisation, domestic manufacturing and also attract foreign investments. This will help component manufacturers strive for scale, which will require setting up of new facilities and create more jobs. With auto being a strategically important sector of the economy, the benefits accrued overall will result in a multiplier effect. This announcement is a significant milestone in India’s journey towards ‘Atmanirbharta’ and will enable the country to join the top echelons of auto manufacturing nations.
Naveen Munjal, MD, Hero Electric
The recent announcements by the Government of India over the last few months have helped propel the EV industry onto its next level. 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. With this announcement of allocating a total of Rs. 26,000 crores to encourage and push adoption of cleaner mobility and technologies, this sector is poised to grow exponentially from here on. The outlay for OEM makers and other incentives on manufacturing auto components that help making transportation cleaner will encourage investments and further drive localisation. This will further help bring down the cost of manufacturing thereby benefiting the consumer, the industry and the environment. Hero Electric supports the government’s initiative and looks forward to leading the new phase of electric mobility in the coming years.
Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors.
As a homegrown leading automotive brand in India, we at Tata Motors are delighted to see the new Production-Linked Incentive (PLI) scheme announced today. The government has taken a holistic approach to make India 'Aatmanirbhar', especially in technology areas, that will be relevant and important in future. The scheme promotes manufacturing, export of electric vehicles and those running on hydrogen fuel cells, their supporting infrastructure, as well as new technology auto parts requiring advanced production techniques. A progressive scheme which will help in accelerating transition to smart, environment-friendly, sustainable mobility solutions. The automotive ecosystem will benefit tremendously as more jobs will be created, component manufacturers can plan their future roadmap better and achieve scale. It is indeed a very strong resolve shown by the government to fulfill the aspiration of India, by becoming a global manufacturing hub of green mobility.
Sohinder Gill, CEO, Hero Electric
At Hero, we have always believed the way forward to encouraging adoption of clean mobility is by front loading incentives and subsidies. Since the amendments to FAME in June, we have seen a wonderful response to EVs from the consumer end and now with the PLI scheme, we expect the same to come in from potential investors and companies looking to invest in technologies that will make products for cleaner modes of transport. The allotment of Rs 26,000 crores will help in creating the initial push required for the industry to further take off and encourage further adoption of EVs- two, three and four-wheelers. We welcome the move and look forward to working with the policy makers to create an environment that helps India achieve the goal of being the world’s largest manufacturing hub for cleaner modes of transport.
Aarthi Sivanandh, Partner, J Sagar Associates
There are various steps to push incentives for growth in the auto sector, that constitutes almost 50 percent of manufacturing activity in India. There have been stamp duty concessions state governments provide on land allotments, electricity subsidies, IP registration reimbursement, environmental protection subsidy and demand supply side incentives for EV sector. However it has still not been enough for this sector to get on par with global players. The PLI is a needed incentive to aid the high cost of logistics. We will have to await further clarity if brownfield investments are also eligible, how net worth, revenue and investments will be reckoned and the actual implementation by applying eligibility criteria. Also helps us meet obligations under the Paris climate accord with the focus on clean energy.
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