The Indian market is often criticised as being hard to crack. A lot of manufactures have exited the Indian market in recent years, the latest being Ford India. The Indian taxes and government rules are often blamed for being harsh on automakers, which is true to some extent. Finally, the government has responded by bringing in a new scheme for the benefit of the automotive industry. This scheme is the production-linked incentive (PLI). In today’s article, we will be looking at this PLI scheme and what are its benefits.

What exactly is this PLI scheme

The Government of India has approved a production-linked incentive scheme for the auto sector. The government is investing Rs 25,938 crore. This scheme is aimed at boosting domestic manufacturing, including electric and hydrogen fuel cell vehicles. This scheme will also focus on improving technology like automatic transmissions, advanced driver assistance systems (ADAS), tyre pressure monitoring, adaptive front lights, hybrid energy storage systems and much more.

What will be the PLI scheme benefits?

According to government estimates, in the next five years, The PLI scheme will bring in investments of over Rs 42,500 crore. It is expected to lead an incremental production of over 2.3 trillion and create around 7.5 lakh new jobs.

Transition to sustainable tech

The government main focus to bring in this new scheme was to speed up the EV transition process in India. Government is hopeful that the existing Rs 18,100 crores scheme for advanced chemistry cells and the fame subsidy will help speed up the transition from fossil-based fuels.

PLI scheme

Industry response

The move has received an overall positive response from the auto sector. This is even though the fund allocation for the auto sector is 50% less than the one planned initially.

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  • The NCAP ratings should also be made mandatory. Many journalists often say that safety can be both active and passive but Personally I don’t believe as NCAP ratings matter and Kia Seltos and Grand i10 Nios are examples because Seltos already proved that it has poor build quality when it was divided into pieces. Nios already tells that Hyundai has no focus on build quality and the cars keep passengers unsafe.