Govt releases SOPs for PLI Auto scheme, industry leaders elated

Govt releases SOPs for PLI Auto scheme, industry leaders elatedGovt releases SOPs for PLI Auto scheme, industry leaders elated

New Delhi: The Union government has announced the standard operating procedures (SOPs) for the automobile sector’s Production Linked Incentive (PLI) scheme.

To be considered for incentives, applicants can submit requests for testing and certification of products that use advanced automotive technology. The ministry hopes that this will increase domestic production, reduce reliance on imports, increase employment opportunities, and support the country’s overall economic growth.

The heavy industries minister, Mahendra Nath Pandey, stated that the SOPs will help strengthen manufacturing and achieve the national goal of Aatmanirbhar Bharat.

According to an official release issued on Thursday, the scheme is expected to attract significant investments and help India become a global center for vehicle manufacturing.

The Ministry of Heavy Industries announced the PLI Scheme for the Indian automobile and auto component industry (PLI-Auto Scheme) on September 23, 2021, with a financial commitment of INR 25,938 crore.

The PLI-Auto Scheme proposes incentives to increase local production of advanced automotive technology (AAT) goods and attract capital into the automotive manufacturing value chain.

Component Champions will manufacture high-value, high-tech components, while Champion OEM will manufacture electric or hydrogen-powered automobiles.

According to industry leaders, it will bring clarity and promote sustainable production.

On this occasion, Girish Wagh, Executive Director, of Tata Motors, said, “The Ministry of Heavy Industries’ announcement of SOP regarding domestic value addition in the PLI scheme is a welcome step forward in providing the clarity that the auto industry had been seeking. We remain optimistic that the steps outlined will enable OEMs to plan their future road-map better, even as we study the details and identify appropriate actions for their effective implementation.”

Suman Mishra, CEO of Mahindra Last Mile Mobility, said, “Mahindra is one of the leading players in the electrification of last mile mobility, and we appreciate the support of the Government to promote EVs through the PLI scheme as well as the release of these SOPs. The PLI will help us introduce more sustainable, technology-driven, and affordable 3-wheeler EVs in India and contribute to a greener future for all.”

Acknowledging the government’s approach in promoting localization through well-thought-out PLI schemes, K N Prasad, Managing Director, Toyota Kirloskar Auto Parts, said, “We thank the Government of India for the announcement of SOPs for the Auto Sector PLI scheme.”

The SOPs released from MOHI, consist of simplified procedures with minimum paperwork as a standing testimony from MOHI to realize “Ease of doing business”.

This definitely reduces the burden on the applicant and helps to speed up the overall process of application and approval process.”

“At present, most of the advanced automotive technology components are being imported because of a non-existent supply chain base. One of the key factors to getting incentives under this PLI scheme is minimum domestic value addition criteria, and this will encourage more localization and will boost the domestic manufacturing sector, and reduce dependence on imports, thereby creating more job opportunities. It would also contribute to the overall economic growth of the nation and enhanced export capabilities,” he added.

Vikram Gulati, Country Head and Executive Vice President of Toyota Kirloskar Motor said, “We strongly believe that India is well positioned to play an important role in contributing to the growing global shift towards electrification. Given the capability of the Indian auto industry and the strong continued Government support, we are well on the way to making visible progress in establishing India as a critical manufacturing hub of advanced, clean, green, and efficient vehicles along their parts, at competitive prices. Schemes like the Production Linked Incentive (PLI) are playing a vital role in attracting investments in advanced and greener technologies.”

Gaurav Vangaal, Associate Director, S&P Global Mobility, said, “India has set itself an uphill task of electrification in the automotive segment. The initial support (PLI) from the government helps to create a conducive environment for investment. S&P Global Mobility expects the benefit of PLI will be seen in the mid-term as we may see the start of EV exports from India to mature markets. However, India needs to remain consistent and competitive in its efforts to attract more global carmakers and suppliers for long-term success.”

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Content Credit: ETAuto

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