Automakers, Auto Component Firms Commit Rs 25,000-Crore Investment Under PLI

As of December 2024, companies under the  PLI-Auto Scheme have committed over Rs 25,000 crore in capital investments, the government said in a statement on Thursday. This includes the establishment of new production facilities and technological upgrades, particularly in the electric vehicle sector.

Notable companies like Tata Motors Ltd. and Mahindra & Mahindra Ltd. have announced major investments aimed at enhancing EV production capacities, it added.

The Union Cabinet had approved Rs 25,938-crore budgetary outlay in September 2021 for the Production Linked Incentive scheme for automobile and auto components.

"PLI-Auto Scheme envisages to overcome the cost disabilities to the industry for manufacturing and boost domestic manufacturing of Advanced Automotive Technology (AAT) products in India," the government said.

This comes after US President Donald Trump announced on Wednesday 25% tariffs on auto imports starting April 2.

This scheme is designed to encourage fresh investments in indigenous manufacturing, thereby enhancing job creation and contributing to the growth of the sector.

The scheme was launched with the goal of creating a robust, globally competitive automobile industry that thrives on advanced technology and offers substantial growth opportunities. Under this initiative, the government seeks to foster innovation, support domestic manufacturers and reduce dependency on imports.

In November 2021, after extensive consultations with industry stakeholders, the Ministry of Heavy Industries notified 19 AAT vehicle categories, and 103 AAT components will also be eligible for the scheme.

Financial year 2024 marked the first performance year of the PLI-Auto Scheme. As of fiscal 2025, the aggregate disbursement of Rs 322 crore has been made under the scheme, said the government.

The scheme has also facilitated the creation of thousands of jobs, both directly and indirectly, in sectors such as manufacturing, supply chain management, and research and development. The localisation of EV production plants has further contributed to job creation in key manufacturing hubs across India.