BUDGET 2025: PLI Auto scheme to get Rs 2,819 crore in FY26

The government has allocated Rs 2,819 crore for the production-linked incentive (PLI) scheme for automobile and auto components in the financial year 2026, as per the union budget presented today.

The government had initially allocated a much larger amount of Rs 3,500 for the scheme in the financial year 2025 . However, revised budget estimate for the year stands at a much lower amount of Rs 347 crore. This reflects the delay in the disbursal of incentives under the scheme.

The Rs 25,938-crore output-linked incentive scheme was launched in 2021 to boost domestic manufacturing of advanced automotive technology (AAT) products and attract investments in the automotive manufacturing value chain.

Initially, the incentives were applicable on determined sales value from the financial year 2022-23 for five consecutive financial years till 2026-27. However, the scheme was later amended to extend the tenure by one year to March 31, 2028.

Last year, the government had said the disbursal of incentives under the PLI Auto scheme, applicable on the “determined sales value” which is defined as the incremental eligible sales of a particular year over the base year, would start in the financial year 2025. However, the disbursal is pending.

The PLI Auto scheme has two components – the Champion OEM incentive scheme for battery electric and hydrogen fuel cell vehicles in all segments, and the component champion incentive scheme for hi-tech and hi-value components. 

Incentives are offered in the range of 13% to 18% for components of electric vehicles and hydrogen fuel cells, while other AAT products get incentives between 8% and 13%. The guidelines mandate that at least 50% of a product's value be generated within the country.

The government has approved 18 companies including Tata Motors, M&M, Maruti Suzuki, Toyota Kirloskar, Hyundai Motor India, Kia India, Piaggio, Eicher, Hero MotoCorp, Bajaj Auto and Ola Electric, to participate in the scheme under the Champion OEM category.

Under the Component Champion category, 67 companies, including Sona BLW Precision, Delphi-TVS Technologies, Bharat Forge, Bosch, Dana Ananda India, Lumax Auto, Minda Corp, Aptiv Components, Maruti Suzuki, Ceat, Hero Cycles, have got approval.

Recently, the government said Tata Motors and Mahindra & Mahindra have submitted incentive claims of Rs 142.13 crore and Rs 104.08 crore, respectively, for determined sales in the financial year 2024 and the claims have been approved. 

The government announced that the first disbursal of incentives under the scheme will be this financial year.

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