Budget FY2025: PIP for Automotive Industry Approved at ₹2,819 Crore
PLI Scheme: Investment and Employment Invested combined for 2024-2025, PLI scheme attracted the amount of funding to the tune of ₹14,043 crores and further also generated jobs at 28,884 in place of an estimated employment of 1.48 lakh. Schemes retain 85 approved applicants with incentives given per business as per its actual incremental sale and value addition. Well-supported by the Economic Survey 2023-24, PLI may see proposed investments of ₹67,690 crore, which would reflect massive interest on the part of automotive players, both domestic and international.
The overall budgetary outlay for the automobile sector under the PLI scheme from FY 2023 to FY 2027 is ₹25,938 crore and is divided into two broad components:
Champion OEM Incentive Scheme - For Original Equipment Manufacturers (OEMs) designing superior automotive technologies for vehicles.
Component Champion Incentive Scheme - Here, a focus is created on manufacturers producing high-value sophisticated auto components.
National Programme on Advanced Chemistry Cell (ACC) Battery Storage - Approved May 2021, Sanctioned ₹18,100 crore that would be dedicated to the process of promoting indigenous battery manufacturing.
The scheme has approved 18 companies in the Champion OEM category and 67 in the Component Champion category. These companies are investing in new auto technologies, such as electric vehicles (EVs), hydrogen fuel cells, and advanced auto components.
Total investments of ₹20,715 crore have been made up to September 2024, while incremental sales amount to ₹10,472 crore through the scheme.
The automobile sector has witnessed better production figures in the recent fiscal. The following is the production of the automobile sector in India for FY 2023-24:
Passenger cars 4,900,000 units
Three-wheelers 990,000 units
Two-wheelers 21,470,000 units
Commercial vehicles 1,070,000 units.
The scheme under PLI will enhance localization and promote efficiency in manufacturing, in addition to having global competitiveness as the objective of the project.
It has every potential to cause innovation and lead to India establishing itself as an automobile manufacturing destination in the entire world, focusing its adoption of electric vehicles and higher technology.
The PLI scheme for the automobile industry remains one of India's significant supports in the manufacturing growth strategy. Though the budgetary provision has been reduced to ₹2,819 crore for 2025-26, this scheme has already encouraged large investments and employment generation. As companies ramp up the production of advanced vehicles and components, this scheme shall be the prime driver of the future growth of India's automobile and EV ecosystem.
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