The 25,938 crore Production Linked Incentive (PLI) scheme for the automotive sector focuses on promoting the manufacture of advanced automotive technology products such as electric and hydrogen fueled vehicles, but excludes the conventional gasoline, diesel and CNG segments according to a senior official.
The Secretary of Heavy Industry, Arun Goel, explained that it is not necessary to give benefits to the ICE segment (internal combustion engines) since it has sufficient capacity in the country. The PLI scheme is incentivizing only advanced automotive technologies or automotive components whose supply chains are weak, dormant, or non-existent.
The PLI scheme is open to existing automotive companies, as well as new investors who are not currently in the car or auto component manufacturing business.
“We are giving incentives for new investments in new technologies,” he told PTI, adding that the ICE technology already exists and “we have sufficient capacity in our country, we have solid supply chains (in that). So what we are incentivizing is the supply chains that are weak, dormant or non-existent. “
He added that ICE technology has been here for the last 100 years, so where is the need to incentivize or subsidize it?
Explaining further, he said that if you look at the world, the share of advanced automotive technologies would reach 30 percent by 2030 from 18 percent today and in India that’s only 3 percent, because India is a low value market.
In advanced automotive technologies, whatever vehicles are made in India, the parts for that are largely imported and for exports, “we are not occupying that space,” he said.
Citing an example of a sunroof, he said there are many ICE components not manufactured in India so far that would be incentivized under the scheme, he said.
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“In terms of vehicles, because ICE is an old technology, it already exists, there is no need to incentivize. What we are not making today: electric vehicles, hydrogen fuel cell vehicles, which will be there in the future as well. that is to be encouraged, “said the secretary.
He also said that the ministry will soon notify the scheme and present detailed guidelines.
When asked if Tesla, the major US-based electric car company, will be a big beneficiary of this scheme, he said that it is a production-linked incentive scheme and that if a company met the criteria , will contribute investments, “we will pay the incentives according to the sales generated from advanced automotive technology.”
He added that the scheme is covering all the cost disabilities that Tesla is talking about for India.
Goel said that when any company does the math, India will be the most attractive in the world.
On reducing funds for the scheme from Rs 57,043 crore to Rs 25,938 crore now, he said that the ministry has identified the needs of the sector.
“… What the Indian auto sector already has and what it needs to add. So after consulting stakeholders with the whole industry, the government identified the required additions and … For that, cost disability, noted by the industry, it has been fully met the incentive (which) will be paid up to 18 percent … And for that, the funding requirement is this (Rs 25,938 crore) which was approved today. Therefore , no cut in the funding requirement for this has been approved, “he said.
The scheme has two components: the Incentive Scheme for OEM Champions (Original Equipment Manufacturers) and the Incentive Scheme for Component Champions.
The OEM Champion Incentive Scheme is a value-of-sales scheme and applies to battery electric and hydrogen fuel cell vehicles in all segments.
Similarly, the Component Champion Incentive Scheme is a sales value-linked scheme, applicable to Advanced Automotive Technology Vehicle Components, Fully Knocked Down (CKD) / Semi Knocked Down (SKD) Kits, 2-Wheel Vehicle Add-ons , 3 wheels, passenger vehicles, commercial vehicles and tractors.