PLI scheme for Automobile, components manufacturers

Union Government notified regarding the Production Linked Incentive (PLI) Scheme for Automobile & Auto components on September 23, 2021.


  • Earlier government had approved the PLI Scheme for Automobile and Auto Component Industry on September 15, 2021.
  • The PLI Scheme for the auto sector seeks to overcome the cost disabilities of the industry for manufacturing Advanced Automotive Technology products across India.
  • This incentive structure will encourage industries in making fresh investments for indigenous global supply chain for Advanced Automotive Technology products.

Investments in Automobile sector

According to an estimate, the Automobile and Auto Components Industry will lead to investments of more than Rs 42,500 crores over a period of five years. It will also lead to an incremental production of about Rs 2.3 lakh crore and create additional employment opportunities of 7.5 lakh jobs. As a result, India’s share in global automotive trade will increase.

About the PLI scheme for auto sector

PLI Scheme for Auto sector is open to existing Automotive companies and new non-Automotive investor companies. It has two components namely, Component Champion Incentive Scheme and Champion OEM Incentive Scheme. This scheme will be implemented for a period of five years starting from Financial Year 2022-2023. Financial Year 2019-20 will be treated as Base Year for calculation of Eligible sales.

  1. Champion OEM Incentive Scheme: This scheme is a ‘sales value linked’ scheme. It is applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments.
  2. Component Champion Incentive Scheme: This scheme is a ‘sales value linked’ scheme. It is applicable on pre-approved Advanced Automotive Technology components of all vehicles.


Leave a Reply