PLI scheme for auto industry and drone industry approved – budgetary outlay of INR 26,058 crore
Government has approved the PLI Scheme for Automobile Industry and Drone Industry. Incentives worth ₹ 26,058 crore will be provided to industry over five years.
PLI Scheme for automotive sector along with already launched PLI for Advanced Chemistry Cell (₹18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) Scheme (₹10,000 crore) is expected to give a boost to domestic manufacturing of Electric Vehicles.
The PLI scheme for auto sector envisages to overcome the cost disabilities to the auto industry for manufacture of Advanced Automotive Technology products in India. It is estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investment of over ₹42,500 crore, incremental production of over ₹2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.
The scheme is open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business. It has two components:
1. Champion OEM Incentive Scheme – A ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments.
2. Component Champion Incentive Scheme – A ‘sales value linked’ scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles and tractors etc.
PLI Scheme for Automobile Industry and Drone Industry is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of ₹ 1.97 lakh crore. With the announcement of PLI Schemes for 13 sectors, minimum additional production in India is expected to be around ₹ 37.5 lakh crore over 5 years and minimum expected additional employment over 5 years is nearly 1 crore.
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