With PLI Booster, India Can be an Auto Manufacturing Hub

IndiaIndia can capitalize on plans announced by multinational corporations to become an integrated manufacturing hub for automotive global supply chains, senior government officials and industry said a day after the government approved the ₹25,938 crores production-linked incentive scheme to promote the transition to advanced technologies.

The scheme, approved on Wednesday, is aimed at helping to hasten the move to electric and hydrogen fuel cell vehicles, which are expected to become popular in the coming years.

“In the last six months, many multinational corporations have announced plans to diversify their supply chains and invest in advanced automotive technologies. Now is the right time (to launch the PLI scheme) to get those investments to India,” said Arun Goel, Secretary, Department of Heavy Industries.

He said the PLI scheme for the automobile sector, along with manufacturing advanced chemistry cells (₹18,100 crores), announced earlier, and subsidies under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) II initiative worth ₹10,000 crores, will make India attractive for setting up production hubs for advanced automotive technologies.

At present, the share of advanced automotive technologies in the local automobile industry stands at around 3%, compared to 18% prevalent globally. The percentage of advanced auto technologies is projected to increase up to 30% by 2030.

Advanced automotive technologies in the country currently face cost disabilities in the range of 15-30% due to the technology gap, lack of local supplier base, and economies of scale. The PLI scheme will enable the industry to focus on developing higher value, higher technology products to transition to connected, clean vehicles to reduce dependence on imports and integrate with the global supply chain.

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