scorecardresearch
Cabinet approves Rs 26,058 cr PLI scheme for auto, drone sectors

Cabinet approves Rs 26,058 cr PLI scheme for auto, drone sectors

The PLI scheme for auto sector is expected to bring investments of over Rs 42,500 crore in five years and lead to incremental production of over Rs 2.3 lakh crore.

The Centre had last year announced the scheme for the automobile sector and auto components sector with an outlay of Rs 57,043 crore, earmarked for a period of five years The Centre had last year announced the scheme for the automobile sector and auto components sector with an outlay of Rs 57,043 crore, earmarked for a period of five years

The Union Cabinet on Wednesday approved a production linked incentive (PLI) scheme of Rs 26,058 crore for automobile sector and drone industry. The PLI scheme for auto sector is expected to bring in investments of over Rs 42,500 crore in five years and lead to incremental production of over Rs 2.3 lakh crore.
 
The scheme will incentivise emergence of global supply chain for advanced automotive technologies in India and will enable the country to leapfrog to environmentally cleaner electric vehicles and hydrogen fuel cell vehicles.
 
"The PLI scheme for auto sector envisages to overcome the cost disabilities to 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," the government said.
 
The scheme is expected to create additional employment opportunities for over 7.5 lakh people.

Also Read: From moratorium on AGR dues to 100% FDI, govt approves bold reforms for telecom sector
 
The PLI scheme for auto sector will be open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business.
 
It will have two components -- Champion OEM Incentive scheme, which will be applicable on battery electric vehicles and hydrogen fuel cell vehicles, and Component Champion Incentive scheme, which will be applicable on advanced automotive technology components of vehicles, completely knocked down (CKD)/ semi knocked down (SKD) kits, vehicle aggregates of two-wheelers, three-Wheelers, passenger vehicles, commercial vehicles and tractors, among others.
 
Meanwhile, the PLI scheme for drones is expected to bring fresh investments of over Rs 5,000 crore in three years and incremental production of over Rs 1,500 crore. It is expected to create 10,000 additional jobs.
 
"The PLI scheme for drones and drone components industry addresses the strategic, tactical and operational uses of this revolutionary technology. A product specific PLI scheme for drones with clear revenue targets and focus on domestic value addition is key to building capacity and making these key drivers of India's growth strategy," the government said.
 
The PLI scheme for automobile industry and drone industry is part of the announcement of PLI schemes for 13 sectors made during the Union Budget 2021-22 with an outlay of Rs 1.97 lakh crore.

Also Read: Meet Sanjay Mehta, India's only angel investor with four unicorns under his belt