The government is likely to consider production-linked incentive (PLI) applications from automobile and auto component companies with Chinese investment once the associated foreign direct investment (FDI) approvals are in place, according to a report by ET. The move could allow existing applications involving Chinese partners to be evaluated for PLI benefits.
A senior government official told ET Auto that the applications could include those from JSW MG Motor India and two ventures of Tata AutoComp Systems with Chinese companies. However, the government is not planning to open a fresh application window under the auto PLI scheme.
“Existing PLI applications that now have FDI approvals will be considered. A window for fresh applications under PLI is not being opened,” the official told ET Auto.
JSW MG Motor India is a joint venture between JSW Group and SAIC Motor. Tata AutoComp Systems' ventures include TACO Prestolite, its partnership with Prestolite Electric Beijing, which develops electric drivetrains and traction motors, and TACO Air International, its partnership with Air International Shanghai Co, which manufactures automotive air-conditioning systems.
Chinese FDI Approvals Linked To PLI Applications
The development follows changes in the processing of FDI proposals involving Chinese investment. According to ET Auto, pending FDI approvals had delayed the processing of some PLI applications. The government has introduced guidelines intended to expedite approvals for FDI proposals involving Chinese investments.
ET Auto reported that some applications involving Chinese partners have already received PLI approval, including an application from Dixon Technologies' venture with a Chinese partner for electronic components.
The move comes as India-China official engagement has increased in recent months. ET Auto reported that President Xi Jinping visited India earlier this month for the BRICS Summit and held a bilateral meeting with Prime Minister Narendra Modi. The two countries have also stepped up ministerial and official-level exchanges and agreed to resume direct flights.
Auto PLI Scheme Has ₹25,938 Crore Outlay
The government approved the PLI scheme for automobiles and auto components in September 2021 with a budgetary outlay of ₹25,938 crore. The scheme is intended to support manufacturing of advanced automotive technology products and is linked to parameters including incremental sales, investment and domestic value addition.
Government data released in July 2026 showed that approved applicants had reported cumulative investment of ₹44,326 crore as of March 31, 2026, against a target investment of ₹42,500 crore through March 2027.
The FY27 Budget allocated ₹5,939.87 crore to the auto PLI scheme, compared with ₹2,091.26 crore in FY26. According to the ET Auto report, the government is expected to disburse around ₹4,000 crore under the scheme during the current fiscal year, with incentives linked to eligible companies' incremental sales in FY26.
The PLI-Auto scheme covers a five-year performance period and requires eligible products to meet domestic value-addition requirements. Government data shows that the scheme had attracted ₹44,326 crore in investment and generated 67,820 jobs as of March 31, 2026.