The Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry has been introduced by the Ministry of Heavy Industries (MHI), Government of India, to enhance India’s manufacturing capabilities in Advanced Automotive Technology (AAT) products.
The scheme aims to:
- Boost domestic production of Advanced Automotive Technology (AAT) vehicles and components.
- Attract investments in the automobile manufacturing value chain.
- Overcome cost disadvantages and achieve economies of scale.
- Strengthen India’s supply chain for AAT products.
- Generate employment opportunities in the sector.
- Encourage Indian manufacturers to move up the value chain to produce high-value-added automotive products.
Scheme Components
The scheme comprises two key components, offering financial incentives based on incremental sales of AAT-related vehicles and components:
-
Champion OEM Incentive Scheme
- Targets Original Equipment Manufacturers (OEMs) to address cost challenges related to Advanced Automotive Technology vehicles.
- It is a sales value-linked incentive applicable to:
- Battery Electric Vehicles (BEVs)
- Hydrogen Fuel Cell Vehicles
- Two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, tractors, and military vehicles.
-
Component Champion Incentive Scheme
- Designed for auto component manufacturers producing AAT components.
- Encourages manufacturers to scale operations globally and establish themselves as “Automotive Champions”.
Eligible Products
- Pre-approved AAT Vehicles and Components.
- Complete Knocked Down (CKD)/Semi Knocked Down (SKD) kits.
- Vehicle aggregates for two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and tractors, including military vehicles.
- The Ministry of Heavy Industries (MHI) will update the list of eligible AAT products as per technological advancements.
Financial Incentives Under the Scheme
Incentive Structure for Champion OEM & New Non-Automotive (OEM) Investor Companies
| Determined Sales Value (₹ Crore) | Incentive (% of Sales Value) |
|---|---|
| ≤ 2,000 | 13% |
| > 2,000 to 3,000 | 14% |
| > 3,000 to 4,000 | 15% |
| > 4,000 | 16% |
| Cumulative ₹10,000 Crore over 5 years | Additional 2% |
Incentive Structure for Component Champion & New Non-Automotive (Component) Investor Companies
| Determined Sales Value (₹ Crore) | Incentive (% of Sales Value) |
|---|---|
| ≤ 250 | 8% * |
| > 250 to 500 | 9% * |
| > 500 to 750 | 10% * |
| > 750 | 11% * |
| Cumulative ₹1,250 Crore over 5 years | Additional 2% |
| Battery Electric Vehicles & Hydrogen Fuel Cell Vehicle Components | Additional 5% |
Note: Incentives for Internal Combustion Engine (ICE) vehicle components in the fifth year will be multiplied by a factor of 0.9.
Eligibility Criteria
1. Existing Automotive Companies
The applicant company or its Group Company(ies) must meet the following eligibility conditions:
| Eligibility Criteria | Auto OEM | Auto-Component Manufacturer |
|---|---|---|
| Global Revenue (Automobile/Component Manufacturing) | ₹10,000 crore | ₹500 crore |
| Investment in Fixed Assets (Gross Block) | ₹3,000 crore | ₹150 crore |
A Group Company(ies) is defined as two or more enterprises where:
- They exercise at least 26% voting rights in the other enterprise.
- They appoint more than 50% of the Board of Directors in the other enterprise (As per FDI Policy Circular 2020).
2. New Non-Automotive Investor Companies
Companies not currently in the automotive sector can qualify if they meet the following:
| Criteria | New Non-Automotive Investor Company |
|---|---|
| Global Net Worth (as of March 31, 2021) | ₹1,000 crore |
| Minimum Committed Investment in India | As per the investment conditions below |
3. Minimum New Domestic Investment Requirements
| Year | Champion OEM (₹ Crore) | Champion OEM (2W & 3W) (₹ Crore) | Component Champion (₹ Crore) | New Non-Automotive OEM Investor (₹ Crore) | New Non-Automotive Component Investor (₹ Crore) |
|---|---|---|---|---|---|
| By March 31, 2023 | 300 | 150 | 40 | 300 | 80 |
| By March 31, 2024 | 800 | 400 | 100 | 800 | 200 |
| By March 31, 2025 | 1,400 | 700 | 175 | 1,400 | 350 |
| By March 31, 2026 | 1,750 | 875 | 220 | 1,750 | 440 |
| By March 31, 2027 | 2,000 | 1,000 | 250 | 2,000 | 500 |
Additional Notes:
- Companies must meet the minimum investment criteria each year.
- Preference will be given to companies front-loading their investment.
- If an approved company fails to meet the investment condition for a particular year, it will not receive incentives for that year but may qualify in future years.
Application Process
Online Application Steps
- Apply within the 60-day application window (as per Notice Inviting Applications).
- Submit the application along with financial and supporting documents.
- Apply through the PLI Auto Portal.
- Log in and submit the application form with all required documents.
- Pay a non-refundable application fee.
- Upon submission, a unique Application ID will be generated for reference.
Approval Process
- Project Management Agency (PMA) will review applications and make recommendations.
- Ministry of Heavy Industries (MHI) will approve applications within 60 days.
- Approved applicants will receive a confirmation letter within 5 working days.
Documents Required
- Certificate of Incorporation (Issued by ROC)
- Memorandum & Articles of Association
- PAN Card
- Import Export Code (IEC) Registration Certificate
- Board Authorization Letter
- CIBIL Report of Company & Credit History Certificate
- Business Profile & Corporate Presentation
- GST Registration Certificate
- Director Profiles & Annual Reports
- Self-Certification of Revenue, Investment, and Net Worth
- Project Report & Business Plan
- Proof of Application Fee Payment
Frequently Asked Questions (FAQs)
Who can apply for the scheme?
Indian automobile and auto-component manufacturers and new non-automotive investors meeting the eligibility criteria.
Can foreign-owned companies apply?
Yes, 100% foreign-owned companies can apply if they meet the investment and revenue criteria.
Can an applicant have multiple manufacturing units?
Yes, applicants can apply for incentives for multiple facilities.
Sources & References
- PLI Auto Scheme Guidelines
- Official Notification
- Ministry of Heavy Industries Website