With a 7.1 percent (approx.) contribution to India’s GDP and the creator of 35 million job opportunities in the country, it is estimated to become the world’s third-largest automotive market in terms of volume by 2026.
Keeping in mind the strategic and economic potential of the sector, the Central Government announced a separate PLI Scheme to boost investments and create global automotive manufacturing champions in India.
The PLI scheme for Automobiles & Auto Components (‘Auto Scheme’) was announced with planned financial outlay of ₹ 57,042 crores (the largest outlay amongst all PLI schemes). It sets an ambitious target of additional investment of over ₹ 1 lakh crore over a five-year period with potential for additional employment generation of 58.84 lakh jobs.
While the Auto Scheme is yet to be notified and is pending Cabinet approval, the broad contours of the Scheme (as available in public domain) is discussed hereunder.
(₹ in Crores)
|Sourcing Incentive||7,210||Benefits for incentivizing ‘increase in purchase value’. For OEMs and CMs.|
|18.075||Sales value linked incentives.
For OEMs only.
|Logistics Cost Incentive||23,628||Sales based incentives to offset logistics costs. For OEMs and CMs.|
|Component Champion Incentive||8,129||Incentives based on additional auto
(₹ in Crores)
 Industry representations have been made to change the Base Year to FY 2019-20
 As per article dated December 17, 2020, and can be accessed at https://auto.economictimes.indiatimes.com/news/industry/etauto-exclusive-pli-scheme-draft- offers-benefit-to-big-auto-manufacturers-only-here-is-why/79751658
 As per news report dated March 16, 2021. Same can be accessed at https://www.businesstoday.in/current/economy-politics/govt- may-upgrade-eligibility-criteria-for-automakers-under-pli-scheme/story/433950.html
 Article can be accessed at https://www.cnbctv18.com/auto/auto-pli-scheme-to-comprise-4-sub-schemes-here-are-the-outlays-8434781.htm