Cabinet Approval Of INR 26k Crore For Auto Sector Will Boost Production, New-age Technologies

Mobility Outlook Bureau
15 Sep 2021
07:53 PM
2 Min Read

The PLI Scheme will incentivise investments in several technologies, including automatic transmission assembly, electronic power steering system, sensors, supercapacitors, ECUs, Parts of EVs, Hydrogen Fuel Cells etc.


The Union Cabinet approval of the INR 26,000 crore Production Linked Incentive (PLI) scheme for the auto sector is welcomed by the industry and described as timed well for the country as the auto industry realigns its supply chain globally. 

The PLI Scheme, with an outlay of Rs.26,000 crore for five years commencing FY23, will incentivise investments in new-age automotive technologies such as automatic transmission assembly, electronic power steering systems, sensors, supercapacitors, ECUs, Parts of EVs, Hydrogen Fuel Cells and its parts, adaptive front

lighting, automatic braking, tyre pressure monitoring system, and collision warning systems, among others.

Earlier, the government announced the PLI for ACC batteries with an outlay of about INR 18,100 crore with an aim to invite investments for manufacturing for advanced energy storage technology batteries.

Kenichi Ayukawa, President, SIAM, said the apex body of the vehicle manufacturers is grateful to the Prime Minister, Minister of Heavy Industries, Secretary Heavy Industries, and all other policy makers in the government involved in launching the PLI Scheme for the auto industry. The scheme will contribute towards reducing carbon emissions and oil imports with local manufacturing. “SIAM will be happy to engage with the Ministry of Heavy Industries for detailing and fine-tuning, execution and further strengthening the scheme,” he added. 

Sunjay Kapur, President, ACMA, said, “In accordance with our national priorities of energy security and climate change & environment, the PLI scheme envisions the creation of an ‘Atmanirbhar’ (self-reliant), globally competitive and future-ready Indian automotive sector. Thrust on incentivising new-age technologies will facilitate the creation of a state-of-the-art automotive value chain in the country and give a much-needed impetus to manufacturing cutting-edge automotive products in India. Further, with global economies de-risking their supply chains, the PLI will aid India in developing into an attractive alternative source of high-end auto components”.

Vipin Sondhi, MD & CEO, Ashok Leyland and Vice President, SIAM, said the scheme provides incentives for incremental performance by the OEMs as manufacturers move towards making India a strong hub for electric mobility while also looking at harnessing the potential of Hydrogen energy for automotive applications. 

Vinod Aggarwal, Treasurer, SIAM and MD & CEO, VECV, opined that the scheme will result in ushering in more advanced technologies for new vehicles in the country. “Such technologies will be now be introduced, much faster, than what we have been seeing in last several years. Focus on next generation sensor-based safety and collision avoidance systems would go a long way in making the vehicles and our roads one of the safest in the world. PLI will also provide an opportunity for the auto industry to increase its electric portfolios, as it will supplement the existing incentives of FAME and lower GST, for these vehicles.”

According to Girish Wagh, Executive director, Tata Motors, this scheme is both progressive and transformational. “Several meaningful incentives have been offered across the entire value chain engaged in manufacturing of battery-powered electric vehicles and hydrogen fuel cell, as well as their supporting infrastructure and exports. Encouraging the production of auto components using advanced technologies will boost localisation, domestic manufacturing and also attract foreign investments,” he said.

“The scheme promotes manufacturing, export of electric vehicles and those running on hydrogen fuel cells, their supporting infrastructure, as well as new technology auto parts requiring advanced production techniques,” he added.

Venu Srinivasan, Chairman, TVS Motor, said, “Any country which aspires to lead in a particular sector needs government support, and this scheme aims to do just that in the future mobility space.”

Vikram Kirloskar, Vice Chairman, Toyota Kirloskar Motor, said the PLI scheme proves to be timely so as to be able to revive the sectoral growth and lay the foundation for the country to become a global auto manufacturing hub. “For our part, as pioneers of electrified technologies, TKM will continue to focus on mass electrification by encouraging localisation of electrified vehicle parts,” he added. 

NB: Photo is representational; courtesy: HMIL.

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