After a slow start, auto PLI claims may zoom in future

The first wave of claims for India's automobile production incentives scheme barely touched ₹500 crore, an amount that may grow exponentially in the years ahead as the electric revolution unfolds and more products secure certification.

- Alisha Sachdev

Just four companies—Tata Motors, Mahindra Last Mile Mobility, Toyota Kirloskar Auto Parts (TKAP) and Ola Electric—submitted claims for FY24, two people aware of the matter said. The production-linked incentives (PLI) scheme for advanced automotive technologies, launched in 2021, has an ambitious outlay of ₹26,000 crore.

However, government officials and industry experts expect a surge in claims from FY26 as locally-made electric cars and larger vehicles enter the market, likely using up the entire fund allocated for the scheme till FY28.

Tata Motors and Mahindra Last Mile Mobility have each submitted claims for close to ₹100 crore, the people cited above said, on the condition of anonymity, adding disbursements are likely to begin by the end of the year. Queries emailed to the two companies as well as the ministry of heavy industries remained unanswered.

The PLI scheme, which covers both automakers and component makers, was designed to stimulate production in advanced automotive and EV sectors by providing financial incentives to companies meeting set localization and sales criteria. So far, 81 companies have enrolled for the five-year scheme.