Tuesday, Sep 21 2021 | Time 14:13 Hrs(IST)
Business Economy

Auto PLI is for new investment in new technologies and not in old ones: Heavy Industry Secretary

New Delhi, Sep 15 (UNI) Companies generating sales out of new automotive technologies such as electric and hydrogen fuel cell would receive payouts from the government under the Rs 25,938 crore production-liked incentive (PLI) scheme, top government official said on Wednesday.

Entities engaged in making internal combustion engine (ICE) vehicles would not get benefits.

"There are many components of ICE which are as on today not made in India they are being incentivised in India. In terms of vehicles, ICE is an old technology, it is already existing, there is no need to incentivise . What we are not manufacturing is electric vehicles, hydrogen fuel cell vehicles which will come in future. So, that’s what is being incentivised," said Heavy Industry Secretary Arun Goel.

"We are giving (incentive) for new investment...new investment in new technologies. The scheme is incentivising only advanced automotive technologies not the technologies which are existing," he noted.

The Union Cabinet on Wednesday approved incentives worth Rs 25,938 crore which will be provided to industry over five years.

Announcing the decision, Union Information and Broadcasting Minister Anurag Thakur said that the PLI Scheme for automotive sector along with already launched PLI for Advanced Chemistry Cell (Rs 18,100 crore) and Faster Adaption of Manufacturing of Electric Vehicles (FAME) Scheme (Rs 10,000 crore) will give a big boost to manufacture of electric vehicles.

Further, it will enable India to leapfrog to environmentally cleaner electric vehicles and hydrogen fuel cell vehicles.

Asked if what types of companies -- local, foreign, auto-component, start-ups or MSMEs -- would benefit the most from the PLI scheme, the Heavy Industry Secretary said that the scheme does not distinguish them.

The PLI scheme for auto sector is open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business.

The scheme has two components viz Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable on Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments.

The Component Champion Incentive scheme is 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 among others.

On a question whether American electric vehicle and clean energy company Tesla would participate in the scheme, Goel said that the scheme was open for all subject to they meeting the eligibility criteria.

Based on total sales generated by a company, the incentive varies from 13 per cent to 18 per cent of the turnover for Champion OEM and new non-automotive investors.

Goel said that with this level of incentive companies would overcome the cost disabilities in manufacturing advanced automotive technology products.

As per government estimate, PLI scheme for auto sector is expected to bring fresh investments of over Rs 42,500 crore in five years and incremental production of over Rs 2.3 lakh crore.

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