Investment in auto sector indicates potential, says Arun Goel

Addressing a press conference on the recently announced PLI scheme in Chennai, Arun Goel, Secretary, Union Ministry of Heavy Industries reiterated the potential for Auto Inc on the basis of the investment seen. "The Indian automotive industry has attracted huge investments of 34.5 billion dollars in five years before Covid. Excluding the pandemic, the domestic sales and exports have grown 8-10 percent," he added.

Replying to questions about whether the Ford plant shutdown in India was a setback, he quipped, “if the auto ecosystem was not attractive here, why would such an investment come in?" Goel explained that the government rolls out schemes for the industry and not for a particular player. He added that the new PLI scheme offers a level playing compared to anywhere in the world, "Our role is like a facilitator and we want to attract investment through the PLI scheme."

The Government recently approved a PLI Scheme worth Rs 26,058 crore for the automobile and drone industry. The scheme for the auto sector is targeted to incentivise high value advanced automotive technology vehicles and products. It is expected to encourage use of better technology, more efficient and green automotive manufacturing practices.

The scheme is part of the overall announcement made for 13 sectors earlier during the FY2022 Union Budget with an outlay of Rs 1.97 lakh crore. The incentive structure is expected to encourage industry to make fresh investments for indigenous supply chains. It is estimated that over five years, the PLI Scheme for automobile and auto components industry will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 230,000 crore and will create additional employment opportunities of over 750,000 jobs. Further this is likely to significantly increase India’s share in global automotive trade.