According to Union Minister Anurag Thakur, the Union Cabinet has approved the production-linked incentive (PLI) program for the vehicle, auto component, and drone manufacture, who confirmed the CNBC-TV18 report. According to the minister, the scheme’s entire cost is Rs 25,938 crore, with Rs 120 crore set aside for the drone PLI scheme.
This initiative, according to Thakur, will create jobs for nearly seven lakh people in the auto industry. According to sources who spoke to CNBC-TV18 earlier, India’s part in the worldwide auto sector is 2%, and it needs to grow. As a result, the scheme aims to push modern automotive technologies. He also advocated for a 17-billion-dollar reduction in component imports. “The Prime Minister wants India to be at the forefront of new technologies,” he stated.
The initial budget for the PLI scheme for car and component makers was Rs 57,000 crore, but this has been lowered because the scheme would now only reward makers of electric as well as hydrogen fuel cell vehicles, leaving out diesel, petrol, and CNG vehicle manufacturers.
The PLI scheme for car components covers a total of 22 components, such as flex-fuel kits, hybrid energy storage systems, hydrogen fuel cells, and electric vehicle elements, such as charging ports, electric vacuum pumps, drive trains, and electric compressors. The component PLI scheme now includes electronic stability control and sunroof.
The scheme also covers petrol and diesel engine parts such as exhaust, after treatment, FIE systems, ECUs, automatic gearbox assemblies, and the electronic power steering systems. Thakur went on to say that the drone sector will be given special consideration, with the drone manufacturer PLI guaranteeing a 20% incentive for the next five years. The Indian drone sector is likely to attract investment of Rs 5000 crore.
The strategy has been changed with a focus on modern automotive technologies, according to sources, after criticism from the Prime Minister’s Office. According to the government, India’s contribution to global automotive exports is under 2%, necessitating the promotion of new technologies such as hydrogen and electric vehicles.
The PLI program for the automobile sector will begin in FY23 and last for five years, with 2019-20 as the foundation year for eligibility requirements. The initiative will benefit ten car makers, 50 auto component producers, and 5 new non-automotive investors.
To be eligible for the plan, OEMs (Automobile original equipment manufacturers) needs to have a minimum turnover of Rs 10,000 crore and a fixed asset investment of Rs 3,000 crore. Auto component manufacturers requires to have at least a revenue of Rs 500 crore and a fixed asset investment of Rs 150 crore to qualify for the PLI. New non-automotive investors, on the other hand, must have a worldwide net worth of about Rs 1,000 crore, as well as a clear business strategy for investing in sophisticated automotive technologies in order to be eligible.