Meeting the industry demand, government on Tuesday has decided to extend the deadline of production linked incentive (PLI) scheme for automobile and auto component, by another year to 2027-28.

Post extension, the five-year scheme, originally in place from 2022-23 to 2026-27, will be active until 2027-28.

Speaking at the ‘Review of PLI-Auto Scheme’ here, Mahendra Nath Pandey, Minister of Heavy Industries said that apart from extending the deadline, the government has also decided to agree with the industry stakeholders to disburse the incentives on a quarterly basis, instead of annual plan, as per the scheme earlier.

“There have been some requests from the industry including extension of deadline of the scheme by one year, quarterly disbursal of the incentives to the qualified companies, and thirdly, to add two more agencies for testing of the vehicles and components – the Global Automotive Research Centre (GARC) in Chennai and National Automotive Test Tracks (NATRAX) in Madhya Pradesh,” Pandey said.

As of now the tests are conducted only at Automotive Research Association of India (ARAI), Pune and International Centre for Automotive Technology (iCAT), Manesar (Haryana).

“The addition of two more centres would help the government as well as the industry, to get the required tests done at a faster pace, so that the PLI scheme can be utilised in a quicker manner,” he said.

Who gets the PLI?

Under the Automotive PLI scheme, incentives are applicable for determined sales of Advanced Automotive Technology (AAT) products (vehicles and components) manufactured in India from April 1, 2022 onwards for a period of five consecutive years.

Pandey mentioned that the PLI-Auto scheme incentivises only those eligible AAT products for which a minimum of 50 per cent Domestic Value Addition (DVA) is achieved and has been certified by Testing Agencies (TAs) of MHI. This criterion shall reduce imports, facilitate deep localization for AAT products and enable creation of domestic as well as global supply chains.

As many as 95 companies have been admitted under the scheme that looks to promote local manufacturing of new technology products such as electric vehicles (EVs) through subsidies.

The investment as reported by the applicants (till June 30, 2023) is ₹10,755 crore out of the total outlay of ₹67,690 crore in the next five years. To facilitate ease of doing business (EODB) in the scheme, MHI published Standard Operating Procedure (SOP) for DVA certification on April 27, 2023. Thereafter, two companies, Tata Motors and Mahindra & Mahindra, have received DVA certification and four more applicants have applied for DVA certification.

Further, another 23 applicants are expected to apply for DVA certification by the end of September. A detailed SOP is being framed for verification and processing incentive claims and stakeholder consultations for the same will be initiated shortly, the Minister added.