Maruti, Eicher, M&M, Bajaj Auto among 75 firms approved in PLI scheme; 10 points

Major automakers such as Maruti Suzuki, M&M, Hyundai Motor, Tata Motors, Bajaj Auto, Hero MotoCorp, TVS Motor, and Ford India were some of the companies to receive approval under the PLI scheme. Moreover, Bharat Heavy Electricals and CEAT received approval under the new Non-Automotive Investor (Component) companies category.

Union Heavy Industries Minister Dr. Mahendra Nath Pandey said, “The overwhelming response shows that Industry has reposed its faith in India’s stellar progress as a world-class manufacturing destination which resonates strongly with Hon’ble Prime Minister’s clarion call of AtmaNirbharBharat – a self-reliant India. India will surely take a huge leap towards cleaner, sustainable, advanced and more efficient Electric Vehicles (EV)based system”.

Here are 10 key highlights of the scheme.

1. Under the PLI scheme, the proposed investment of ₹45,016 crore is from approved applicants under Champion OEM Incentive Scheme and ₹29,834 crore from approved applicants under Component Champion Incentive Scheme.

2. A total of 115 companies had filed their application under the scheme. From which, 5 Auto OEM companies had applied for both parts of the scheme. The scheme was open for receiving applications before midnight of 9 January 2022. Incentives are applicable under the scheme for Determined Sales of Advanced Automotive Technology (AAT) products (vehicles and components) manufactured in India from 1 April 2022 onwards for 5 consecutive years.

3. The schemes have two components viz. Champion OEM incentive scheme and Component Champion incentive scheme. A total of 95 applicants have been approved under this PLI scheme. Earlier, the government approved 20 applicants (along with their 12 subsidiaries)for the Champion OEM Incentive scheme. Subsequently, the government has processed the applications received under the Component Champion incentive scheme and 75 applicants (along with their 56 subsidiaries) have been approved under this category of the scheme.

4. Apart from Indian business groups, approved applicants include groups from countries such as Japan, Germany, USA, UK, Republic of Korea, Ireland, France, Belgium, Netherlands, and Italy.

5. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments.

6. Meanwhile, the Component Champion Incentive scheme is a ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors, etc.

7. The Centre had approved the PLI scheme for the Automobile and Auto Component Industry to enhance India’s Manufacturing Capabilities for Advanced Automotive Products (AAT) with a budgetary outlay of ₹25,938 crore.

8. The scheme was made open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business.

9. The scheme proposes financial incentives to boost domestic manufacturing of Advanced Automotive Technology (AAT) products and attract investments in the automotive manufacturing value chain. Its prime objectives include overcoming cost disabilities, creating economies of scale, and building a robust supply chain in areas of AAT products. It will also generate employment. This scheme will facilitate the Automobile Industry to move up the value chain into higher value-added products.

10. The Centre expects PLI scheme for the automotive sector along with PLI scheme for Advanced Chemistry Cell (ACC) and FAME to enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced, and more efficient Electric Vehicles (EV) based system.

Here’s a list of some companies that have received approval under the Champion OEM Incentive scheme:

Under Champion OEM (except 2W & 3W), companies like Ashok Leyland, Eicher Motors, Ford India, Hyundai Motor, Kia India, Mahindra & Mahindra, PCA Automobiles India, Pinnacle Mobility Solutions, Suzuki Motor Gujarat, and Tata Motors received approval.

In Champion OEM 2W & 3W category, approval was given to companies like Bajaj Auto, Hero MotoCorp, Piaggio Vehicles, and TVS Motor Company. Meanwhile, in New Non-Automotive Investor (OEM) category, firms like Axis Clean Mobility, Booma Innovative Transport Solutions, Elest, Hop Electric Manufacturing, Ola Electric Technologies and Powerhaul Vehicle.

Notably, a total of 73 existing Automobile and Auto Component Manufacturing companies were approved under Component Champion Incentive Scheme. Some of the companies are Maruti, Bharat Forge, Hero MotoCorp, Bosch, Minda Corporation, Motherson Sumi Systems, Toyota Industries, Tube Investments Of India and Wabco India were among others.

BHEL and CEAT were approved under New Non-Automotive Investor (Component) companies.