The government has zeroed in on more than 70 companies ― including Bosch, Minda Industries, Ceat, Tata Auto Components and Bharat Forge ― to provide support meant for component manufacturers under a `25,938-crore production-linked incentive (PLI) scheme for automobiles and auto parts industries, sources told FE.
Delphi-TVS, Toyota and Lumax may also feature among the successful candidates, one of the sources said.
The proposed incentives for component manufacturers range from 8% to 13% of determined (incremental) sales value, while those for original equipment manufacturers (OEMs) vary from 13% to 18%.
Heavy industries secretary Arun Goel told FE that the process to select eligible component manufacturers is on and the list of beneficiaries will be announced “very soon, within a week”. He, however, declined to reveal either the names or the number of companies that would be selected.
The department had received 86 applications from component manufacturers.
The PLI scheme has two parts ― Champion OEM Incentive Scheme and Component Champion Incentive Scheme.
The government has already announced a list of 20 OEMs that have been selected. They include Suzuki Motor Gujarat, Tata Motors, Hyundai, Mahindra & Mahindra, Ashok Leyland, Bajaj Auto, HeroMotoCorp and Ola Electric.
Under the scheme, incentives will be granted for sales of advanced automotive technology products (both vehicles and components) manufactured in India for five years from April 1, 2022.
The scheme is an important part of the Centre’s efforts to erase “cost disabilities”, create economies of scale and build a robust supply chain of advanced automotive technology products in India.
Extant auto-component manufacturers must have minimum annual revenue of `500 crore and fixed asset investment of `150 crore to qualify for the benefits.
The PLI scheme will be effective from FY23 (incentives will be disbursed from FY24 for five years) and the base year for computing sales value would be FY20.
This scheme, along with an already-launched `18,100-crore PLI programme for advanced chemistry cell and a `10,000-crore Faster Adaption of Manufacturing of Electric Vehicles scheme will “enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient electric vehicles-based system”, the heavy industries ministry has said.
This is part of the 13 PLI schemes, announced by the government in the wake of the Covid-19 pandemic in 2020, to lure mainly large corporations to expand manufacturing, bolster supply chains and boost exports. The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles, are estimated at `1.97 trillion over a five-year period.
The schemes (excluding the one for semiconductors launched recently), put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years.
from | The Financial Express https://ift.tt/5vIScDM
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