The government of India has approved the scheme “Production Linked Incentive Scheme for Automobile and Auto Components Industry” in India to enhance India’s Manufacturing Capabilities for Advanced Automotive Products.
The “Production Linked Incentive Scheme for Automobile and Auto Components Industry” proposes financial incentives to boost domestic manufacturing of Advanced Automotive Technology products and attract investments in the automotive manufacturing value chain. Its prime objectives include overcoming cost disabilities, creating economies of scale, and building a robust supply chain in areas of Advanced Automotive Technology products. It will also generate employment. This scheme will facilitate the Automobile Industry to move up the value chain into higher value-added products.
Scheme Components: The scheme consists of two components incentivizing incremental sales of automobile and auto components related to Advanced Automotive Technology.
1. Champion OEM Incentive Scheme: The incentive scheme targeted to address the cost disabilities related to Advanced Automotive Technology vehicles faced by OEMs. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable to Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments – 2 wheelers, 3-wheelers, passenger vehicles, commercial vehicles, Tractors, Automobiles meant for Military use, and any other Advanced Automotive Technology vehicle as prescribed by MHI depending upon technical developments.
2. Component Champion Incentive Scheme: The ‘Component Champion’ Incentive scheme is aimed at identifying and incentivizing Auto component champions that can achieve the global scale of operations and become ‘Automotive Champions’ for the auto-component manufacturing sector related to Advanced Automotive Technology.
Eligible Product:
1. Pre-approved Advanced Automotive Technology Vehicles and pre-approved Advanced Automotive Technology Components of all vehicles, CKD/SKD kits, Vehicle aggregates of 2- Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors including automobiles meant for military use.
2. The list of Advanced Automotive Technology Vehicles and Advanced Automotive Technology Components will be prescribed and can be amended by MHI from time to time depending upon technological developments.
Benefits
1. Incentive Slabs for Champion OEM and New Non-Automotive (OEM) Investor company:
| Determined Sales Value (in ₹ Crore) | Incentives (%age of Determined Sales Value) |
| <= 2,000 | 13% |
| > 2,000 to 3,000 | 14% |
| > 3,000 to 4,000 | 15% |
| > 4,000 | 16% |
| Cumulative Determined Sales Value of ₹10,000 Crore over 5 years | Additional 2% |
2. Incentive slab for Component Champion and New Non-Automotive (Component) Investor Company:
| Determined Sales Value (in ₹ Crore) | Incentives (%age of Determined Sales Value) |
| <= 250 | 8%* |
| > 250 to 500 | 9%* |
| > 500 to 750 | 10%* |
| > 750 | 11%* |
| Cumulative Determined Sales Value of ₹1,250 Crore over 5 years. | Additional 2% |
| Battery Electric vehicles & Hydrogen fuel cell vehicles components | Additional 5% |
*Multiplied by a factor of 0.9 in the fifth year for eligible sales relating to Internal Combustion Engine (ICE) vehicle components.
Documents Required
1. Certificate of Incorporation (Issued by ROC)
2. Memorandum & Articles of Association (Submitted to ROC)
3. PAN Card
4. Import Export Code (IEC) Registration Certificate
5. Letter of Authorization by Board of Directors or Managing Director or Equivalent (incl. subsidiary(ies))
6. Certificate from the Company Secretary of the Applicant / Managing Director for Credit History (incl. subsidiary(ies))
7. CIBIL Report of the Company (incl. subsidiary(ies))
8. Business Profile/ Corporate Presentation of the Applicant (incl. subsidiary(ies))
9. GST Registration Certificate (incl. subsidiary(ies))
10. Shareholding Pattern (Latest submitted with ROC and certified by the Company Secretary of the company or in case the applicant is not having any ‘Company Secretary’ – by the Managing Director) (incl. subsidiary(ies))
11. Profile of Directors
12. Annual Report of Holding Company
13. Self-Certification on Revenue/ Investment/ Net worth from each of the Group Company (ies) whose credentials have been considered
14. Financial Details of Subsidiary(ies)
15. Project Report/ Business Plan (incl. for Subsidiary(ies))
16. Application Fee Payment Proof
Eligibility
The applicant company or its Group company(ies) will need to meet the following common criteria to qualify and receive benefits under the Scheme:
Basic Eligibility Criteria:
1. For a company or its Group company(ies) with an existing presence in India or globally in the Automotive vehicle and components manufacturing business:
| Eligibility Criteria | Auto OEM | Auto-Component |
| Global group* Revenue (from automotive and/or auto component manufacturing) | Minimum ₹ 10,000 crore | Minimum ₹ 500 crore |
| Investment | Global Investment of Company or its Group* Company(ies) in fixed assets (gross block) of ₹ 3,000 crores. | Global Investment of Company or its Group* Company(ies) in fixed assets (gross block) of ₹150 crores. |
*Group Company(ies) shall mean two or more enterprises which, directly or indirectly, are in a position to:
Exercise twenty-six percent or more of voting rights in the other enterprise;
Or
Appoint more than fifty percent of members of the Board of Directors in the other enterprise (As defined in the FDI Policy Circular of 2020).
2. For new non-automotive investor companies or its Group company(ies) that may want to participate in this scheme:
| Eligibility Criteria | New Non-Automotive investor company or its Group company(ies) (who are currently not in the automobile or auto component manufacturing business) |
| Global net worth | ₹ 1000 crore based on audited financial statements for the year ending March 31, 2021. |
| Committed investment in India over five year period | As per Minimum New Domestic Investment Conditions mentioned below. |
3. Minimum New Domestic Investment Conditions: Cumulative New Domestic Investment Condition of Performance (₹.Crore)
| Cumulative new domestic investment to be achieved | Champion OEM (Except 2W & 3W) | Champion OEM 2W & 3W | Component Champion | New Non-Automotive Investor (OEM) company or its Group company(ies) | New Non-Automotive investor (Component) company or its Group company(ies) |
| Upto or before March 31, 2023 | 300 | 150 | 40 | 300 | 80 |
| Upto or before March 31, 2024 | 800 | 400 | 100 | 800 | 200 |
| Upto or before March 31, 2025 | 1400 | 700 | 175 | 1400 | 350 |
| Upto or before March 31, 2026 | 1750 | 875 | 220 | 1750 | 440 |
| Upto or before March 31, 2027 | 2000 | 1000 | 250 | 2000 | 500 |
Application Process
Step 01: The applicant companies are required to submit an application along with financial & supporting documents.
Step 02: All applications will be submitted through an online portal maintained by the PMA. https://pliauto.in/
Step 03: Applicants need to “Sign in” using their login credentials and apply for the scheme. https://pliauto.in/login
Step 04: The Application Form along with details of all necessary supporting documents, to be submitted at the time of application.
Step 05: A non-refundable application fee would be payable for each application.
Step 06: Upon successful submission of an application, PMA will issue a unique Application ID to the applicant for all future references pertaining to the Scheme.
FAQs
Can an applicant have multiple manufacturing facilities?
An applicant can have multiple manufacturing facilities/ locations in India.
Who is an applicant under the scheme?
An applicant under the scheme is a i. Company incorporated/ registered in India under the Companies Act, 2013, engaged in the automotive and/or auto component manufacturing sector or ii. New Non-Automotive Investor company (who is currently not in an automobile or auto component manufacturing business) incorporated/ registered in India under the Companies Act, 2013 meeting the eligibility criteria specified under the scheme and making an application for seeking approval under the Scheme.
