The Ministry of Heavy Industries has approved incentive claims totaling Rs 246 crore from Mahindra & Mahindra (M&M) and Tata Motors under the ambitious Rs 25,938 crore Production Linked Incentive (PLI) scheme for the automobile and auto components industry. This marks a significant step in the government’s effort to bolster domestic manufacturing capabilities and strengthen the sector’s competitiveness.
HD Kumaraswamy, the Minister for Heavy Industries and Steel, expressed his satisfaction with the progress made by original equipment manufacturers (OEMs) in achieving localized manufacturing. He highlighted initiatives such as the PLI scheme, which aim to reduce dependency on imports and foster growth in domestic production.
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Kumaraswamy congratulated Tata Motors and M&M for their efforts in developing local manufacturing capabilities. He further express confidence that more companies would capitalize on the opportunities provide by the PLI scheme, which expect to play a crucial role in the country’s manufacturing growth.
Tata Motors has submitted an incentive claim of Rs 142.13 crore, based on determined sales in FY 2023-24. Mahindra & Mahindra has claimed Rs 104.08 crore, supported by determined incremental sales of AAT products amounting to Rs 800.59 crore in the same fiscal year. M&M’s cumulative investment for the period totals Rs 978.30 crore.
The claims also include sales from M&M’s electric three-wheeler (e3W) models, including Treo, Treo Zor, and Zor Grand, which amounted to Rs 836.02 crore. These models’ domestic value addition has been certified by the Automotive Research Association of India (ARAI), ensuring their eligibility under the scheme.
The PLI scheme, which was approved on September 15, 2021, is designed to operate from FY 2023-24 to FY 2027-28. It aims to enhance India’s manufacturing capabilities, particularly in Advanced Automotive Technology (AAT) products, address cost disabilities, and create a robust supply chain.
The scheme offers incentives ranging from 13-18 percent for components related to electric vehicles and hydrogen fuel cells. Other AAT components are eligible for incentives of 8 to 13 percent. It is expected to generate substantial investments and create incremental sales, contributing to the country’s economic growth.
Since its launch, the PLI scheme has already facilitated Rs 20,715 crore in investments, leading to incremental sales of Rs 10,472 crore as of September 2024. The first incentive disbursements are expect to begin in FY 2024-25, further driving the development of the sector.
A key requirement of the scheme is that at least 50 percent of the value added to products must be domestic, while both domestic and export sales are eligible for incentives. This will ensure that the benefits of the scheme support long-term growth in India’s automotive manufacturing capabilities.
The approval of these claims will enable Tata Motors and Mahindra & Mahindra to strengthen their position in the competitive global market, driving increased local production and job creation in India’s automotive sector.
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