Production-Linked Incentive (PLI) Scheme for Auto sector

Production-Linked Incentive (PLI) Scheme for Auto sector

Subject – Economy

Context – Auto sector gets ₹26,058-crore PLI scheme to push new tech, clean fuels

Concept –

• The Union Cabinet approved a PLI (Production Linked Incentive) scheme for the auto sector to promote advanced technologies, including clean energy, with incentives of ₹26,058 crore to be provided over five years.
• The auto sector is expected to attract fresh investments of over ₹42,500 crore in the five years and incremental production of over ₹2.3-lakh crore with the introduction of the PLI scheme.
• Also approved was a PLI scheme for the drone industry, with an allocation of ₹120 crore spread over three financial years. It is expected to bring fresh investments of over ₹5,000 crore and incremental production of over ₹1,500 crore.
• The PLI scheme for the automotive sector along with the already launched PLI for Advanced Chemistry Cell (₹18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) Scheme (₹10,000 crore) will give a big boost to manufacture of electric vehicles.
• The PLI Scheme is open to existing automotive companies as well as new ones currently not in the automobile or auto components manufacturing business.
• The scheme has two components. The first, called the Champion OEM Incentive Scheme, is a ‘sales value linked’ plan, applicable to Battery Electric and Hydrogen Fuel Cell Vehicles of all segments.
• The second, the Component Champion Incentive Scheme, is a ‘sales value linked’ plan for advanced technology components, Completely and Semi-Knocked Down (CKD/SKD) kits, vehicle aggregates of 2-wheelers, 3-wheelers, passenger vehicles, commercial vehicles and tractors.

To know more about PLI Scheme, please click here.

To know more about PLI Scheme for textiles, please click here.