New Delhi: The Union government has announced the standard operating procedures ( SOPs) for the Production Linked Incentive (PLI) scheme for the automobile sector. Applicants can submit requests for the testing and certification of products utilizing advanced automotive technology to be considered for incentives. With this, the ministry hopes to increase domestic production, decrease reliance on imports, increase employment prospects and support the country’s general economic growth.Mahendra Nath Pandey, the minister for heavy industries, said that the SOPs will help strengthen manufacturing footing and achieve the national goal of Aatmanirbhar Bharat.
According to an official release on Thursday, the scheme is expected to draw sizable investments and assist India in becoming a global center for vehicle production.
The PLI Scheme for the Indian automobile and auto component industry (PLI-Auto Scheme), with a financial commitment of INR 25,938 crore, was announced by the Ministry of Heavy Industries on September 23, 2021.
Incentives are proposed under the PLI-Auto Scheme to increase local production of advanced automotive technology (AAT) goods and draw capital into the value chain of automotive manufacture.
The program is divided into two parts: Component Champions will produce high-value, high-tech components, and Champion OEM will produce electric or hydrogen-powered automobiles.
Will bring clarity, promote sustainable production, say industry leaders
On this occasion, Girish Wagh, Executive Director, Tata Motors, said, “The Ministry of Heavy Industries’ announcement of SOP regarding domestic value addition in the PLI scheme is a welcome step forward in providing the clarity that the auto industry had been seeking. We remain optimistic that the steps outlined will enable OEMs to plan their future road-map better, even as we study the details and identify appropriate actions for their effective implementation.”
Suman Mishra, CEO of Mahindra Last Mile Mobility, said, “Mahindra is one of the leading players in electrification of last mile mobility, and we appreciate the support of the Government to promote EVs through the PLI scheme as well as the release of these SOPs. The PLI will help us introduce more sustainable, technology-driven, and affordable 3-wheeler EVs in India and contribute to a greener future for all.”
Acknowledging the government’s approach in promoting localization through well-thought out PLI schemes, K N Prasad, Managing Director, Toyota Kirloskar Auto Parts, said, “We thank the Government of India for the announcement of SOPs for the Auto Sector PLI scheme. The SOPs released from MOHI, consist of simplified procedures with minimum paperwork as a standing testimony from MOHI to realize “Ease of doing business”. This definitely reduces the burden on the applicant and helps to speed up the overall process of application and approval process.”
“At present, most of the advanced automotive technology components are being imported because of a non-existent supply chain base. One of the key factors to get incentives under this PLI scheme is minimum domestic value addition criteria, and this will encourage more localisation and will boost domestic manufacturing sector and reduce dependence on imports, thereby creating more job opportunities. It would also contribute to the overall economic growth of the nation and enhanced export capabilities,” he added.
Vikram Gulati, Country Head and Executive Vice President of Toyota Kirloskar Motor, said, “We strongly believe that India is well positioned to play an important role in contributing to the growing global shift towards electrification. Given the capability of the Indian auto industry and the strong continued Government support, we are well on the way to making visible progress in establishing India as a critical manufacturing hub of advanced, clean, green and efficient vehicles along their parts, at competitive prices. Schemes like the Production Linked Incentive (PLI) are playing a vital role in attracting investments in advanced and greener technologies.”
Gaurav Vangaal, Associate Director, S&P Global Mobility, said, “India has set itself an uphill task of electrification in the automotive segment. The initial support (PLI) from the government helps to create a conducive environment for investment. S&P Global Mobility expects the benefit of PLI will be seen in the mid-term as we may see the start of EV exports from India to mature markets. However, India needs to remain consistent and competitive in its efforts to attract more global carmakers and suppliers for long-term success.”
