Production Linked Incentive Scheme For Automobile And Auto Component Industry
13%+ incentive on determined sales value · automobile & auto component makers · India
The PLI Scheme for Automobiles and Auto Components provides 8–16% incentives on incremental sales for manufacturers of electric vehicles (battery electric and hydrogen fuel cell) and advanced auto components in India. Two components exist: the Champion OEM Incentive for vehicle manufacturers and the Component Champion Incentive for parts makers. Apply through the online portal at pliauto.in within 60 days of the Notice Inviting Applications.
About This Scheme
The PLI Scheme for Automobiles and Auto Components provides 8–16% incentives on incremental sales for manufacturers of electric vehicles (battery electric and hydrogen fuel cell) and advanced auto components in India. Two components exist: the Champion OEM Incentive for vehicle manufacturers and the Component Champion Incentive for parts makers. Apply through the online portal at pliauto.in within 60 days of the Notice Inviting Applications.
Full official description
The government of India has approved the scheme “Production Linked Incentive Scheme for Automobile and Auto Components Industry” in India to enhance India’s Manufacturing Capabilities for Advanced Automotive Products. The “Production Linked Incentive Scheme for Automobile and Auto Components Industry” proposes financial incentives to boost domestic manufacturing of Advanced Automotive Technology products and attract investments in the automotive manufacturing value chain. Its prime objectives include overcoming cost disabilities, creating economies of scale, and building a robust supply chain in areas of Advanced Automotive Technology products. It will also generate employment. This scheme will facilitate the Automobile Industry to move up the value chain into higher value-added products. Scheme Components: The scheme consists of two components incentivizing incremental sales of automobile and auto components related to Advanced Automotive Technology. 1. Champion OEM Incentive Scheme: The incentive scheme targeted to address the cost disabilities related to Advanced Automotive Technology vehicles faced by OEMs. The Champion OEM Incentive scheme is a ‘sales value linked’ scheme, applicable to Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments – 2 wheelers, 3-wheelers, passenger vehicles, commercial vehicles, Tractors, Automobiles meant for Military use, and any other Advanced Automotive Technology vehicle as prescribed by MHI depending upon technical developments. 2. Component Champion Incentive Scheme: The ‘Component Champion’ Incentive scheme is aimed at identifying and incentivizing Auto component champions that can achieve the global scale of operations and become ‘Automotive Champions’ for the auto-component manufacturing sector related to Advanced Automotive Technology. Eligible Product:
- Pre-approved Advanced Automotive Technology Vehicles and pre-approved Advanced Automotive Technology Components of all vehicles, CKD/SKD kits, Vehicle aggregates of 2- Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors including automobiles meant for military use.
- The list of Advanced Automotive Technology Vehicles and Advanced Automotive Technology Components will be prescribed and can be amended by MHI from time to time depending upon technological developments.
Benefits
- Champion OEM incentive: 13–16% of determined incremental sales value (additional 2% bonus for cumulative sales above ₹10,000 crore over 5 years)
- Component Champion incentive: 8–11% of incremental sales (additional 2% for cumulative ₹1,250 crore; additional 5% for EV or hydrogen fuel cell components)
- Incentives apply on incremental sales above the base year for 5 consecutive years
- Supports development of a full domestic component-to-final-product ecosystem, reducing dependence on imports
💡 Why Startups Should Care
This is one of India's largest sector-specific PLI schemes, targeting Advanced Automotive Technology (EVs, hydrogen fuel cells, advanced components). For an auto component manufacturer investing in next-gen technology, the incentive scales meaningfully with your sales growth.
Who Can Apply (Eligibility)
- Auto OEMs: global group automotive revenue of at least ₹10,000 crore and global fixed asset investment of at least ₹3,000 crore
- Auto component makers: global group revenue of at least ₹500 crore and global fixed assets of at least ₹150 crore
- New non-automotive investor companies: global net worth of at least ₹1,000 crore (as of March 2021) and commitment to minimum domestic investment milestones over 5 years
- Must meet annual cumulative domestic investment milestones (ranging from ₹150 crore to ₹2,000 crore depending on category by 2027)
- Eligible products: BEVs, hydrogen fuel cell vehicles, CKD/SKD kits, and approved advanced auto components
How to Apply
- Watch for the Notice Inviting Applications (60-day window).
- Prepare your application with Certificate of Incorporation, MOA/AOA, and PAN card.
- Submit Import Export Code registration and other required documents.
- Apply as a Champion OEM or component manufacturer per the eligibility criteria.
- On selection, meet investment and sales commitments to claim annual incentives.
Frequently Asked Questions
Who is an applicant under the scheme?
An applicant under the scheme is a i. Company incorporated/ registered in India under the Companies Act, 2013, engaged in the automotive and/or auto component manufacturing sector or ii. New Non-Automotive Investor company (who is currently not in an automobile or auto component manufacturing business) incorporated/ registered in India under the Companies Act, 2013 meeting the eligibility criteria specified under the scheme and making an application for seeking approval under the Scheme.
What are the circumstances under which an applicant may be ineligible for the scheme?
The applicants whose accounts are declared as Non-Performing Asset (NPA) as per RBI guidelines or defaulter or wilful defaulter as per RBI/CIBIL or SEBI debarred list or reported as fraud by any bank, financial institution or non-banking financial companies etc. would be considered ineligible. Further, there should not be any insolvency proceedings admitted against the Applicant in the National Company Law Tribunal (NCLT) etc.
Can an applicant have multiple manufacturing facilities?
An applicant can have multiple manufacturing facilities/ locations in India.
Are Greenfield projects and Brownfield projects both allowed under the scheme?
Yes, Greenfield projects and Brownfield projects both are allowed under the scheme.
Whether a Proprietorship, Partnership and Limited Liability Partnership (LLP) could avail PLI benefits?
No, Proprietorship, Partnership, and LLPs are not allowed under the scheme. Any company incorporated in India and as defined in the Companies Act 2 of 16 2013, proposing to manufacture one or more eligible product(s) under the scheme, can be an applicant.
Can a 100% foreign-owned company be eligible under PLI Scheme?
Yes, but it has to be registered in India to apply under the scheme.
Do the Value-Added Resellers and Trading companies which are not in manufacturing business qualify under the scheme?
Yes, any Company registered in India under the Companies Act can apply under the scheme subject to meeting the eligibility criteria and establishing a manufacturing facility for production of the eligible products under the scheme.
Can two or more companies of the Group apply through a single common Application?
Any number of companies of the Group is permitted to apply under this scheme as an individual applicants by submitting separate applications. However, they can use the global group revenue, gross block, and net worth of the Group in their separate applications respectively.
How many components are there in this scheme?
There are two components in the scheme i. Champion OEM incentive scheme ii. Component Champion incentive scheme
Can a company submit Multiple Applications as Applicant under different Categories?
An applicant eligible for applying under Champion OEM can also apply for the Component Champion segment. However, an auto component manufacturer as an applicant eligible for applying under the Component Champion segment cannot apply under Champion OEM.
Can an applicant approved under both Champion OEM and Component Champion segment claim incentive for the same component under both segments?
An approved legal entity as an Automotive OEM company or New NonAutomotive Investor company can avail incentives under both components of the scheme subject to the condition that any eligible product shall be incentivized only once under the scheme. Any double claim of incentive for the same product under component level and vehicle level can lead to the qualification of the legal entity involved on this ground alone in addition to any other legal action as applicable under the law.
In case the outlay of incentive exceeds, will the budgetary outlay be enhanced?
This is a fund-limited scheme. In case the calculated incentive pay-out exceeds the budgetary outlay, the scheme could be exhausted earlier than 5 (Five) years period and the incentive pay-out will be reduced on a pro-rata basis as per the formulation developed across all PLIs.
Is there any segregation in the budgetary outlay based on vehicle segments like 2W, 3W, 4W, CV, Tractors and Vehicles used for military purpose etc.?
No. There is only one allocation in the scheme.
Is there any segregation in the budgetary outlay for vehicles and Auto components in the scheme?
No. There is only one allocation in the scheme.
What is the period for making an application under the Scheme?
The window for receiving applications through the online portal of the scheme shall be 60 days starting from the date of Notice Inviting Applications.
What is the base year for calculation of eligible sale value?
Financial Year 2019-20 shall be treated as the base year for calculating eligible sale value (not applicable for approved new non-automotive investor companies).
Can any applicant company claim incentive for any Automobile or Auto component manufactured by them?
No. The applicant company once selected and approved under the scheme can claim an incentive on the Determined sales value of eligible Advanced Automotive Technology products prescribed by MHI.
Can any approved company claim scheme incentive for all Advanced Automotive Technology (AAT) products manufactured by them?
Any approved company can claim incentive under the scheme for only those Advanced Automotive Technology products meeting the condition of minimum 50% domestic value addition.
When can an applicant submit a claim for disbursements under PLI?
An applicant may submit a claim for disbursement of incentive within 6 (six) months from the end of the financial year to which the claim pertains or within 3 (three) months from the date of finalization of Audited Financial Statements for the same financial year, whichever is later. Claim for any financial year period shall be made only once, unless withdrawn, and no subsequent part claims shall be allowed for the said period.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- Certificate of Incorporation (issued by ROC)
- Memorandum & Articles of Association
- PAN card
- Import Export Code (IEC) registration certificate