PLI Schemes Leads To Rs 25,000 Crore Investment Commitments In Auto Sector

The Production Linked Incentive (PLI) Scheme for Automobile & Auto Components led companies to commit around Rs 25,000 crore as of December 2024. The capital investment is committed towards setting up new production facilities and upgrading technology.

The Union Cabinet approved the PLI Scheme for Automobile & Auto Components on September 15, 2021 with budgetary outlay of Rs 25,938 crore. PLI-Auto Scheme envisages to overcome the cost disabilities of the industry for manufacturing and boost domestic manufacturing of Advanced Automotive Technology (AAT) products in India. The incentive structure is to encourage industry to make fresh investments for indigenous manufacturing of AAT products and create additional jobs. PLI scheme for the auto sector is being implemented as per the approved guidelines.

According to Government data, as of December 2024, companies under the scheme have committed over Rs 25,000 crore in capital investment, including setting up new production facilities and upgrading technology. For instance, Tata Motors and Mahindra & Mahindra have committed to massive investments in EV production capacity.

The scheme also has created thousands of direct and indirect jobs in manufacturing, supply chain management, and R&D. Notably, new EV production plants have led to localised employment in manufacturing hubs.

Sales growth in sectors like electric vehicles (EVs) and critical components have seen significant improvements. For example, the introduction of new models in the EV sector has led to a rise in sales.

The Fiscal 2023-24 was the first performance year of the scheme for which disbursement happened in 2024-25. Aggregate incentives of Rs 322 crore have been disbursed under the scheme as of now.

The PLI-Auto scheme is playing a transformative role in enhancing India's automotive manufacturing ecosystem, reducing dependence on imports, and integrating the domestic industry into the global supply chain, said the Government.