Incentive Scheme
Auto PLI aided INR 207.15 bln investments, INR 104.72 bln incremental sales, says Minister Kumaraswamy
This story was originally published at 13:00 IST on 18 January 2025
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NEW DELHI – The Production-Linked Incentive scheme for the automobile and auto components industry has already achieved attracting investments worth INR 207.15 billion and generating INR 104.72 billion in incremental sales as of September, Minister of Heavy Industries H.D. Kumaraswamy said Saturday. The first round of incentives under this initiative is set to be disbursed in 2024-25 (Apr-Mar). "The government's automobile and auto components PLI scheme has significantly boosted local manufacturing," the minister said, while speaking at the Federation of Automobile Dealers Associations' 13th Summit held here.
The government announced the PLI scheme for the automobile sector in September 2021 with a total outlay of INR 259.38 billion for five years, but later extended the scheme for one more year till FY28. The gestation period of the scheme was initially set to end in FY23, and disbursal was supposed to begin from FY24. However, after the extension of the scheme, the gestation period was also extended by a year.
Speaking about the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme, Kumaraswamy said out of the INR 115 billion allocated for it, the government has disbursed INR 88.44 billion as of October. Launched in 2019, this scheme was launched to boost the development of electric vehicles.
The uptick in government schemes reflects the underlying demand in the automotive sector, the minister said. "Despite global uncertainties, I am pleased to know that India's automotive sector remains on a strong growth trajectory," he said.
C. S. Vigneshwar, the president of the Federation of Automobile Dealers Associations, said while addressing the event that the outlook for the automobile sector remains promising in the long term. Passenger vehicle volumes are forecasted to reach 8.36 million units by 2030, with a compound annual growth rate of 9.7% for 2023-2030, he said. This growth was buoyed by a rise in the per capita income over the years. In 2024, dealers sold 26.1 million units, 9.1% higher than in 2023.
The passenger vehicle penetration rate was 25 in 1,000 people in 2024 and is forecasted to rise to 72 in every 1,000 people by the end of 2025, he said. "This indicates a broad market opportunity for carmakers." End
Reported by Priyasmita Dutta
Edited by Tanima Banerjee
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