Govt clears ₹246 crore incentive for Mahindra & Mahindra, Tata Motors under PLI scheme

The Ministry of Heavy Industries has cleared the ₹246-crore incentive claim by automobile majors Mahindra & Mahindra and Tata Motors under the government’s Production Linked Incentive (PLI) scheme for the automobile and auto components industry, reported PTI.

H D Kumaraswamy, Minister for Heavy Industries and Steel, expressed satisfaction with the progress made by auto original equipment manufacturers (OEMs) toward achieving domestic manufacturing through various initiatives like the PLI scheme.

He also congratulated Tata Motors and M&M for developing this capability.

Kumaraswamy exuded confidence that more applicants would take advantage of the PLI scheme.

Incentive claims by Tata Motors and M&M

Tata Motors had submitted a claim of nearly ₹142.13 crore based on determined sales in FY 2023-24 for the PLI scheme, reported PTI quoting people aware of the matter. The eligible sales of Advanced Automotive Technology (AAT) products from Tata Motors include the Tiago EV (electric four-wheeler), Starbus EV (electric bus) and Ace EV (electric cargo vehicle), worth a total of ₹1,380.24 crore.

Mahindra & Mahindra had submitted an incentive claim of ₹104.08 crore based on determined incremental sales of AAT products totalling ₹800.59 crore for FY 2023-24, with a total investment of ₹978.30 crore, officials said. The eligible sales from their e3W models, including Treo, Treo Zor and Zor Grand totalled ₹836.02 crore, supported by a certificate of domestic value addition (DVA) issued by the Automotive Research Association of India (ARAI).

"The total claims from these two applicants amount to approximately ₹246 crore, which have been examined and recommended by the Project Management Agency (PMA) and subsequently approved by the Ministry of Heavy Industries (MHI)," PTI quoted an official as saying.

More about the PLI scheme

The PLI scheme is aimed at enhancing India’s manufacturing capabilities in AAT products and addressing cost disabilities. It also focuses on establishing a robust supply chain.

The scheme, launched to function between FY24 and FY28, was approved on September 15, 2021. The incentive disbursements under the scheme are scheduled to be made between FY25 and FY29.

Incentives of 13-18% are offered under the scheme for components related to electric vehicles and hydrogen fuel cells. Other AAT components will receive incentives of 8 to 13%.

As of September 2024, the scheme has already facilitated an investment of ₹20,715 crore, leading to incremental sales of ₹10,472 crore, an official told PTI. The first incentive disbursement is expected in 2024-25. The scheme’s significant features include the requirement of a minimum of 50% domestic value addition and eligibility for both domestic and export sales.