Introduction: India’s Production Linked Incentive (PLI) Scheme for Automobile and Auto Components witnesses a one-year extension, effective from the financial year 2023-24. The scheme, initially approved in 2021, allocates a budget of Rs. 25,938 crore over five years (FY2022-23 to FY2026-27).
Key Features:
- Focus on Advanced Automotive Technology (AAT): The scheme aims to promote the manufacturing of AAT products, facilitating deep localization and establishing a global supply chain.
- Zero Emission Vehicles (ZEVs): Special emphasis on incentivizing Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles.
Recent Amendments:
- Extended Tenure: The incentive will apply for five consecutive financial years, starting from 2023-24.
- Threshold Criteria: Companies failing to meet the first-year sales threshold won’t receive incentives for that year but remain eligible with a 10% YoY growth.
Way Forward: The extension and amendments aim to provide clarity, flexibility, and continued support for the automobile sector’s growth and competitiveness.