AgenciesThe government has already received investment proposals to the tune of Rs 45,016 crore from the 20 approved applicants of PLI auto scheme.

The sought-after production linked incentive scheme of the government for the automobile and auto component sector has attracted 76% more investment than the planned target of Rs 42,500.

Auto and component manufacturers together have proposed to invest Rs 74,850 crore in the country over the next five years. While the 20 automakers approved under the scheme have proposed to invest Rs 45,016 crore, the 75 component makers approved under the Component Champion Incentive Scheme has proposed to invest an added Rs 29,834 crore.

Minister for Heavy Industries Mahendra Nath Pandey said, “The overwhelming response shows that industry has reposed its faith in India’s stellar progress as a world class manufacturing destination which resonates strongly with Hon’ble Prime Minister’s clarion call of AtmaNirbharBharat – a self-reliant India. India will surely take a huge leap towards cleaner, sustainable, advanced and more efficient Electric Vehicles (EV)based system”.

As many as 83 companies had applied for the Component Champion Incentive Scheme. Of these 75 companies have been shortlisted which includes Maruti Suzuki, Hero MotoCorp, Minda Industries, Bharat Forge, Tata Autocomp, Ceat, Sandhaar Technologies, Sona Comstar, Bosch amongst others, said people in the know.

A minimum investment cap for auto component companies over 5 years was Rs 250 crore and for new-age component companies was Rs 500 crore. Apart from catering to the growing domestic market, there is an increased traction for sourcing out of India as part of global automakers China plus strategy.

The Rs 25,938 crore PLI scheme for the auto and component sector has been designed to help the industry in overcoming cost disabilities,creating economies of scale and building a robust supply chain in areas of Advanced Automotive Technologies (AAT). The scheme will facilitate the automotive industry to move up the value chain into higher value-added products, apart from generating employment. The scheme will provide incentive of up to 18% , to encourage industry to make fresh investments in indigenous supply chain of AAT products.

Sunjay J Kapur, President, Automotive Component Manufacturers Association (ACMA) & Chairman Sona Comstar said, “Today’s announcement has indeed enthused the entire auto components industry and will be a catalyst in our transformational journey from a conventional industry to a mobility industry….That apart, a slew of policy measures announced in the recent past including the extension of FAME-2 scheme, the PLI on ACC battery, the policy initiative on battery swapping and energy as service, among others, will create a new l paradigm of technological excellence in the automotive supply chain in India to make it globally competitive.”

It was initially estimated that over a period of five years, the PLI Scheme for Automobile and Auto Components Industry will lead to fresh investments of over Rs 42,500 crores, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs. The investment commitment is much more and it is likely to beat the internal targets on job creation and production output.