Government Extends PLI Scheme for Automobile Industry with Amendments

• 03 Jan 2024

The government has recently extended the tenure of the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Components industry by one year, introducing partial amendments.

Key Points

• Extended Tenure with Amendments: The PLI Scheme for Automobiles and Auto Components sees an extension by one year with partial amendments, aiming to provide clarity and support to the sector.
• Incentive Duration: Under the amended scheme, incentives will be applicable for a total of five consecutive financial years, commencing from the financial year 2023-24.
• Disbursement Timing: Incentive disbursement is scheduled for the following financial year, 2024-25.
• Eligibility Period: Approved applicants can avail benefits for five consecutive financial years, but not beyond the financial year ending on March 31, 2028.
• Amendments to Ensure Fairness and Support Investment Strategies: If an approved company fails to meet the threshold for an increase in Determined Sales Value over the first year, it will not receive incentives for that year.
• Eligibility for benefits in the subsequent year is retained if the company meets the threshold, ensuring a level playing field and supporting companies with front-loaded investments.
• Enhanced Clarity and Sector Support: The Ministry of Heavy Industries emphasizes that these amendments aim to provide greater clarity and support to the automobile sector.
• The goal is to promote growth and competitiveness within the industry, aligning with the government's commitment to fostering a robust manufacturing ecosystem.