According to the notification, the scheme proposes financial incentives to boost the production of domestic advanced automotive technology products.
The central government on September 24 issued a gazette notification for the Rs 25,938-crore production-linked incentive (PLI) scheme for the automobile sector. Last week the cabinet approved the PLI scheme for the auto industry, auto-component industry and drone industry to boost the manufacturing abilities of the country.
According to the notification, the scheme proposes financial incentives to boost the production of domestic advanced automotive technology products in order to bring in investment in the automobile value chain.
‘Its prime objectives include overcoming cost disabilities, creating economies of scale and building a robust supply chain in areas of advanced automotive technology products. It will also generate employment. This scheme will facilitate the automobile industry to move up the value chain into higher value-added products,’ the notification said.
The scheme has two components – incentivising incremental sales of automobiles and auto components related to advanced automotive technology. To qualify, the global group for auto original equipment manufacturer (OEM) has to be a minimum of Rs 10,000 crore and for auto components, at least Rs 500 crore. OEMs require global investment in fixed assets worth Rs 3,000 crore and for auto components, it is worth Rs 150 crore.
