Auto PLI scheme to add 8 more beneficiaries from FY27; action against non-investing firms: Report

The automobile PLI scheme was cleared by the Union Cabinet on September 15, 2021, with a total outlay of Rs 25,938 crore spread over five years.

• Three more automakers, five parts firms to receive PLI incentives from FY27
• Number of PLI scheme beneficiaries to rise from 10 to 18 by end of FY27
• Govt to invoke bank guarantees of 10 firms with zero investment over two years

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Three more vehicle manufacturers and five additional auto component makers will start receiving incentives under the production-linked incentive (PLI) scheme for the automobile sector from 2026-27 (FY27), Hanif Qureshi, additional secretary at the Ministry of Heavy Industries (MHI), said on Wednesday, Business Standard reported.

With these additions, the number of companies benefiting from the scheme is expected to rise from the current 10 to 18 by the end of FY27, the report said.

The automobile PLI scheme was cleared by the Union Cabinet on September 15, 2021, with a total outlay of Rs 25,938 crore spread over five years. A total of 82 applicants, including vehicle manufacturers and auto component makers, were approved under the scheme, Business Standard noted.

During a media briefing, Qureshi said the government plans to invoke bank guarantees submitted by 10 approved companies that failed to make any investment over the past two financial years. All the companies facing action are auto component manufacturers, he said. "Every company has to give a bank guarantee to participate in this scheme. If there is zero investment for two consecutive years, the bank guarantee can be invoked," Qureshi said, adding that around 10 firms had not invested any amount.

Disbursements under the scheme have been modest so far. The ministry released Rs 263 crore in FY24 and Rs 325.37 crore in FY25, Business Standard reported. Of the Rs 20,936 crore sanctioned for the current financial year, about Rs 2,000 crore has been disbursed till now. Qureshi said payouts were lower in the initial years as companies focused on setting up manufacturing facilities and meeting the domestic value addition requirement of over 50 per cent, which is mandatory to qualify for incentives.

In FY26, five vehicle makers-Mahindra & Mahindra, Tata Motors, Bajaj Auto, TVS Motor and Ola Electric-and four auto component companies are set to receive incentives under the scheme, Qureshi said, Business Standard reported. The component makers include Delphi-TVS Technologies, Sona BLW Precision Forgings, Bosch Automotive Electronics India and Tata AutoComp Systems.

Toyota Kirloskar Motor, which received incentives in FY25, will not claim benefits in FY26 but is expected to resume participation from FY27, the report said.

From FY27 onwards, companies such as Eicher Motors, Pinnacle Mobility Solutions and Hero MotoCorp are expected to begin availing incentives, while additional vehicle makers likely to come on board include Dana TM4 India, Uno Minda, and Cummins Technologies India, Business Standard said.

Since the launch of the scheme, incentives have been extended to support the production of 1,042 million electric two-wheelers, 39,838 electric three-wheelers, 79,540 electric four-wheelers and 1,391 electric buses, Qureshi said, as cited by Business Standard.