According to the Ministry of Heavy Industries, the government anticipates that the January–March quarter of the current fiscal year 2025 would see the beginning of the incentives under the production-linked incentive (PLI) system for automobiles and auto components.
In order to encourage investments in the automobile manufacturing value chain and increase local production of advanced automotive technology (AAT) goods, the Rs 25,938 crore output-linked incentive plan was introduced in 2021.
The “determined sales value,” which is the additional qualified sales of a given year over the base year, is the basis for which incentives are available. The incentives are expected to be paid out between 2024–2025 and 2028–2029. According to the ministry, the first incentive payout is expected to occur in 2024–2025.
The Champion OEM incentive program for battery electric and hydrogen fuel cell vehicles across all segments and the Champion component incentive program for high-tech and high-value components are the two halves of the PLI Auto program.
While subsidies for other AAT goods range from 8% to 13%, incentives for hydrogen fuel cell and electric vehicle components range from 13% to 18%. According to the standards, a minimum of 50% of the value of a product must be produced domestically.
Tata Motors, M&M, Maruti Suzuki, Toyota Kirloskar, Hyundai Motor India, Kia India, Piaggio, Eicher, Hero MotoCorp, Bajaj Auto, and Ola Electric are among the 18 firms that the government has authorized to take part in the program under the Champion OEM category.
As of September 2024, the initiative has drawn an investment of Rs 20,715 crore, for a total expected investment of Rs 67,690 crore. This has resulted in an increase in sales of Rs 10,472 crore.
The applicants are meeting the requisite 50% domestic value addition (DVA), according to Minister for Heavy Industries HD Kumaraswamy, who anticipates that more applicants who have earned DVA certificates for at least 50% would soon begin producing cars and auto parts in India.