The Union Cabinet on Wednesday gave a nod to a PLI scheme for the automobile industry to boost the production of electric vehicles and hydrogen fuel vehicles as well as give a push to the sector. The scheme will incentivise the emergence of Advanced Automotive Technologies global supply chain in India.
Incentives worth Rs 26,058 crore will be provided to the automobile sector to increase the production of components like cars, auto parts, and other related products in India.
The PLI scheme will generate as many as 7.5 lakh jobs for the auto sector, as per government estimates.
Last year, the government had announced the scheme for the automobile and auto components sector with an outlay of ₹ 57,043 crore, for a period of five years. The Cabinet has reduce the scheme for the sector to ₹ 25,938 crore to shift focus on hydrogen fuel vehicles and electric vehicles.
The auto component segments that are covered under the PLI scheme include electronic power steering system, automatic transmission assembly, sensors, sunroofs, supercapacitors, adaptive front lighting, tyre pressure monitoring system, automatic braking, tyre pressure monitoring system, and collision warning system.
The PLI scheme for the auto sector is part of the overall production-linked incentives announced for 13 sectors in the Budget 2021-22 with an outlay of ₹ 1.97 lakh crore.
Earlier, auto industry body Society of Indian Automobile Manufacturers (SIAM) said that the PLI scheme will increase competitiveness and strengthen the growth of the sector.
Meanwhile, shares of auto component makers on Wednesday, September 15, ralied after the Cabinet approved the incentive scheme for auto makers. Shares of automotive axle maker Jamna Auto rallied more than nine per cent to hit an intraday high of ₹ 93.70, whereas, Varroc Engineering advanced 18 per cent, GNA Axles rose three per cent, and Pricol advanced five per cent, among others.
Also, the measure of auto shares on the National Stock Exchange, Nifty Auto index, gained 0.5 per cent after the announcement of PLI scheme.