Last year, the government had announced the scheme for the automobile and auto components sector with an outlay of Rs 57,043 crore, earmarked for five years.
The focus is now more on battery electric and hydrogen fuel cell vehicles.
Component segments that are expected to be covered under the scheme include automatic transmission assembly, electronic power steering system, sensors, supercapacitors, sunroofs, adaptive front lighting, automatic braking, tyre pressure monitoring system, and collision warning system.
Earlier, auto industry body SIAM said the scheme announced by the government will increase competitiveness and take the growth of the sector to the next level.
The scheme for the sector is part of the overall production-linked incentives announced for 13 sectors in the Union Budget 2021-22 with an outlay of Rs 1.97 lakh crore.
The PLI scheme will help bring scale in key sectors and create and nurture global champions. More details on allocation are awaited.
The PLI scheme for the auto sector, according to experts, is clearly indicative of the government’s shift in focus towards advanced technologies and a greener environment. The same is likely to give a boost to the Electric Vehicles and Hydrogen Fuel Cell Vehicles.
“While the scheme is incentivizing the manufacturing in the vehicle and component space, the industry awaits similar policy measures to promote the manufacturing of goods required for setting up the infrastructure required for charging such vehicles. The beneficiaries in the PLI scheme for auto sector are likely to be 10 vehicle manufacturers, 50 auto-component manufactures and 5 new non-automotive investors planning to enter into the automotive sector,” said Saurabh Agarwal, Tax Partner, Automotive sector, EY India.