The Ministry of Heavy Industries has notified the Production Linked Incentive (‘PLI’) scheme for the automobile and auto components industry.
Certain highlights of the scheme which is to be read along with the guidelines laid down for the effective operation and smooth implementation of the scheme are,
- Financial incentives to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain.
- Eligible products cover pre-approved advanced automotive technology vehicles and pre-approved advanced automotive technology components of all vehicles, CKD/SKD kits, vehicle aggregates of 2-wheelers, 3-wheelers, passenger vehicles, commercial vehicles and tractors including automobile meant for military use. The list will be prescribed and can be amended from time to time.
- Scheme is designed to incentivize advanced automotive technology products only eligible advanced automotive product on standalone basis at component level or in integration with the vehicle. Double claim, i.e. at component level and vehicle level not permissible.
- Existing automobile manufacturers should have global revenue of INR 10,000 crore and global investment in fixed assets at INR 3000 crore.
- Existing auto components manufacturers should have global revenue of INR 500 crore and investment of INR 150 crore.
- New non-automotive investor company would require global net worth of INR 1000 crore plus must satisfy minimum new domestic investment conditions.
- Non-automotive company or its group company(ies) can qualify provided they present a clear business plan to invest in India and generate revenues.
- Minimum 50% domestic value addition will be required for incentives. Testing agency of the Ministry will certify domestic value addition in the eligible product.
- Incentives for auto manufacturers:
- Year on Year (YoY) growth of minimum 10% in Determined Sales Value of first year i.e. INR 125 crore must be achieved by all approved companies to become eligible to receive incentive.
- For determined sales value up to INR 2000 crore, the incentive will be 13% of such value. If the determined sales value is between INR 2000 crore to 3000 crore, from 3000 to 4000 crore or greater than INR 4000 crore, the incentives will be 14%, 15% and 16% respectively.
- Approved companies that achieve a target cumulative increase in determined sales of INR 10,000 crore across the duration of the scheme will receive an additional incentive of 2%.
- Incentives for component manufacturers:
- Year on Year (YoY) growth of minimum 10% in determined sales value of the first year i.e. INR 25 crore must be achieved by all approved companies.
- For determined sales value up to INR 250 crore, the incentive will be 8% of such value. If the determined sales value is between INR 250 crore to 500 crore, from 500 to 750 crore or greater than INR 750 crore, the incentives will be 9%, 10% and 11% respectively.
- Approved companies that achieve a target cumulative increase in determined sales value of INR 1250 crore across the duration of the scheme will receive an additional 2% incentive.
- Battery Electric vehicles & Hydrogen fuel cell vehicles components will get an additional 5% incentive.
- Applications will be invited within 60 days of notification of this scheme.
- Window for receiving applications through the Notice Inviting Applications will be for a period of 60 days.
- Applicant companies are required to submit an application along with financial & supporting documents, including audited financial statements (profit & loss, balance sheet) of the legal entity applying for the scheme as well as that of the global group company.
- Scheme will be implemented through a Project Management Agency (PMA) which will be responsible for providing secretarial, managerial and implementation support.