PLI Scheme: MHI approves 20 companies under the “Champion OEM Incentive Scheme” for the auto sector
Ministry of Heavy Industries (MHI) India has announced that it has received a total of 115 companies that had filed their application under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India which was notified on 23 September 2021.
The scheme was open for receiving applications till 23:59:59 hours IST on 9 January 2022. Incentives are applicable under the scheme for determining sales of Advanced Automotive Technology (AAT) products (vehicles and components) manufactured in India from 1 April 2022 onwards for five consecutive years.
The Government approved the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India for Enhancing India's Manufacturing Capabilities for Advanced Automotive Products (AAT) with a budgetary outlay of Rs.25,938 crore. The Production Linked Incentive (PLI) Scheme for Automobile and Auto component industry 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.
MHI has processed the applications received under the Champion OEM Incentive scheme and 20 applicants (along with their 12 subsidiaries) have been approved under this category of the scheme. Applications for the Component Champion Incentive scheme are being processed separately.
Following is the list of applications approved under the Champion OEM Incentive scheme:
The PLI Scheme for the auto sector was open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business. The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive scheme is a 'sales value linked' scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments. 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.
This PLI Scheme for the automotive sector (Rs.25,938 crore) along with the already launched PLI scheme for Advanced Chemistry Cell (ACC) (Rs.18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) (Rs.10,000 crore) will 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.
The PLI scheme for the Automobile and Auto Component Industry has been a huge success in terms of the applications received from local as well as globally headquartered groups engaged in/ proposing to manufacture Advanced Automotive Technology vehicles/ products. Apart from Indian business groups, approved applicants for the Champion OEM Incentive scheme include groups from countries such as the Republic of Korea, USA, Japan, France, Italy, UK, and the Netherlands.
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 Atmanirbhar Bharat - a self-reliant India.