Ministry of Heavy Industries (MHI) on Thursday said it has approved incentive claims of ₹246 crore submitted by Mahindra & Mahindra (M&M) and Tata Motors under the ₹25,938 crore production linked incentive (PLI) scheme for the automobile and auto components industry.

According to the MHI, Tata Motors submitted an incentive claim of around ₹142.13 crore based on determined sales in FY 2023-24. Similarly, M&M had submitted an incentive claim of ₹104.08 crore based on determined incremental sales of Advanced Automotive Technology (AAT) products totalling ₹800.59 crore for FY 2023-24, with a cumulative investment of ₹978.30 crore, officials said.

The applications have been examined and recommended by the Project Management Agency (PMA) and subsequently approved by the MHI. Both M&M and Tata Motors did not respond to queries for comments.

The eligible sales of AAT products from Tata Motors include the Tiago EV (an electric four-wheeler), Starbus EV (an electric bus model), and Ace EV (an electric cargo vehicle), totalling ₹1,380.24 crore. For M&M, the eligible sales from their e3W models—including Treo, Treo Zor, and Zor Grand—amount to ₹836.02 crore, supported by a certificate of DVA issued by the Automotive Research Association of India (ARAI), officials at MHI said.

The PLI scheme was approved on September 15, 2021 and is designed to operate from FY 2023-24 to FY 2027-28, with incentive disbursements scheduled from FY 2024-25 to FY 2028-29. Under this scheme, incentives are offered ranging from 13 per cent to 18 per cent for components related to electric vehicles (EVs) and Hydrogen Fuel Cells, while other AAT components receive incentives between 8 per cent and 13 per cent.

Progress Made

“As of September 2024, the scheme has already facilitated an investment of ₹20,715 crore, leading to incremental sales of ₹10,472 crore. The first incentive disbursement is anticipated in FY 2024-25. Key features of the scheme include a requirement for a minimum of 50 per cent domestic value addition (DVA) and eligibility for both domestic and export sales,” the MHI said.

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

He congratulated both Tata Motors and M&M for developing this capability and expressed confidence that more applicants who have obtained DVA certificates of at least 50 per cent under the PLI Auto scheme will soon commence production of automobiles and auto components in India.

Apart from M&M and Tata Motors, other major OEMs including TVS Motor Company, Eicher Motors, Bajaj Auto, Ola Electric, Sona BLW, Delphi-TVS, Dana TM4, Toyota Kirloskar Motor who have acheived 50 per cent DVA, sources at MHI added.