Govt Clears Rs 246 Crore PLI Claims from M&M, Tata Motors

The Ministry of Heavy Industries has approved incentive claims of Rs 246 crore submitted by Mahindra & Mahindra (M&M) and Tata Motors under the government’s Rs 25,938 crore Production-Linked Incentive (PLI) scheme for the automobile and auto components industry.

The PLI scheme, aimed at boosting domestic manufacturing of advanced automotive technology (AAT) products, has seen encouraging progress with notable participation from original equipment manufacturers (OEMs).

H.D. Kumaraswamy, Minister for Heavy Industries and Steel, expressed his satisfaction with the strides made by the automotive sector towards localized manufacturing. He also praised Tata Motors and Mahindra & Mahindra for developing this capability and expressed confidence that more industry players would soon take advantage of the PLI scheme.

Tata Motors claimed an incentive of approximately Rs 142.13 crore, based on the determined sales of AAT products in FY 2023-24. Eligible sales from Tata Motors’ Advanced Automotive Technology (AAT) products include the Tiago EV (electric four-wheeler), Starbus EV (electric bus), and Ace EV (electric cargo vehicle), totaling Rs 1,380.24 crore.

On the other hand, Mahindra & Mahindra submitted an incentive claim of Rs 104.08 crore, reflecting determined incremental sales of AAT products totaling Rs 800.59 crore in FY 2023-24. M&M’s eligible sales included their e3W models like the Treo, Treo Zor, and Zor Grand, amounting to Rs 836.02 crore. This was supported by a certificate of domestic value addition (DVA) from the Automotive Research Association of India (ARAI).

Together, the claims from the two automotive giants amount to Rs 246 crore, which have been thoroughly examined and approved by the Ministry of Heavy Industries (MHI), following a recommendation from the Project Management Agency (PMA).

The PLI scheme, launched on September 15, 2021, is designed to enhance India’s manufacturing capabilities, reduce cost disabilities, and strengthen the supply chain for electric vehicles and hydrogen fuel cell technologies. The scheme is set to operate from FY 2023-24 to FY 2027-28, with incentive disbursements expected to begin in FY 2024-25.

Incentives range from 13-18% for components related to electric vehicles and hydrogen fuel cells, and 8-13% for other AAT components. The scheme mandates a minimum of 50% domestic value addition and is applicable to both domestic and export sales.

As of September 2024, the scheme has already facilitated an investment of Rs 20,715 crore, leading to incremental sales of Rs 10,472 crore. The first incentive disbursement is anticipated in 2024-25, further accelerating the development of India's electric vehicle and AAT manufacturing ecosystem.