Production Linked Incentive Scheme for Automobile and Auto Component Industry in India
Part of: Prelims and Mains GS-3- Indian Economy
Context: A total of 115 companies have filed their applications under the Production Linked Incentive Scheme for Automobile and Auto Component Industry in India.
- Incentive structure to encourage industry to make fresh investments in indigenous supply chain/ deep localization of Advanced Automotive Technology products
- PLI Scheme for Automotive Sector along with PLI scheme for ACC and FAME to enable India to leapfrog to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system
Production linked incentive (PLI) scheme aims at boosting domestic manufacturing and exports, is expected to –
- Increase the country’s production by USD 520 billion in the next five years
- Make India self-reliant in manufacturing goods for local and export markets, positioning it as a global manufacturing hub
- Make domestic manufacturing competitive and efficient, build capacity, and benefit from economies of scale, enhance exports, attract investment and create jobs.
Production Linked Incentive Scheme for Automobile and Auto Component
The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme, and will be implemented over a period of five years starting from FY 2022-2023.
- Envisages to overcome the cost disabilities of the industry for manufacture of Advanced Automotive Technology products in India.
- The incentive structure will encourage industry to make fresh investments for indigenous global supply chain of Advanced Automotive Technology products.
- It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investments of over Rs 42,500 crores, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.
- Increase India’s share in global automotive trade.
- The scheme has been devised for both existing automotive firms and new investors.
- The ‘sales value linked’ scheme includes a ‘champion OEM’ incentive applicable on battery electric vehicles and hydrogen fuel cell vehicles.
- A ‘component champion’ incentive is for advanced automotive technology components.
News Source: PIB