AI SummaryProduction Linked Incentive Scheme for Automobile and Auto Component Industry is a central scheme run by the Ministry of Heavy Industries that gives financial incentives to companies making advanced automotive technology products. The Union Cabinet approved the scheme on 15 September 2021 with a total budget outlay of ₹25,938 crore spread over five years from FY2022-23 to FY2026-27.
Until March 31, 2028, the scheme remains available for eligible manufacturers of electric and hydrogen fuel cell vehicles and high-value auto components. In the Union Budget 2026-27, the government raised the allocation for this scheme to ₹5,940 crore, so financial support for the automotive manufacturing sector continues to grow.
The scheme is built on two main parts. Champion OEM Incentive Scheme helps original equipment manufacturers build advanced technology vehicles such as battery electric vehicles and hydrogen fuel cell vehicles. Component Champion Incentive Scheme supports auto-component makers who can reach global scale and become leaders in the supply chain.
Eligible products include pre-approved advanced automotive vehicle types and components across segments like 2-wheelers, 3-wheelers, passenger cars, commercial transport, tractors and defense vehicles. Until now the scheme has helped bring in investments of over ₹35,000 crore, supported the production of nearly 14 lakh electric vehicles and created close to 49,000 jobs, with 18 of the 82 approved applicants successfully receiving incentives.
Production Linked Incentive Scheme for Automobile and Auto Component Industry - Overview
The scheme focuses on Zero Emission Vehicles, which means battery electric vehicles and hydrogen fuel cell vehicles. Incentives apply from FY2022-23 to FY2026-27, and payment happens in the following financial year from FY2023-24 to FY2027-28.
Key Information
| Scheme Name | Production Linked Incentive Scheme for Automobile and Auto Component Industry |
| Level | Central |
| Beneficiary States | All |
| Managing Agency | Ministry of Heavy Industries |
| Budget Outlay | ₹25,938 crore for FY2022-23 to FY2026-27 |
| FY2026-27 Allocation | ₹5,940 crore |
| Incentive Benefit | Production-linked financial payouts |
| Official Portal | pliauto.in |
Benefits
Approved applicants can get financial incentives that are based on their sales value. Incentive rates differ between the two parts of the scheme, and a company must make sure at least 50 percent of a product's value comes from domestic production. Incentive slabs also change based on the type of product being made.
Incentive Slabs for Champion OEM and New Non-Automotive (OEM) Investor Companies:
| Determined Sales Value (in ₹ Crore) | Incentives (% of Sales) |
|---|---|
| 1 to 2,000 | 13% |
| > 2,000 to 3,000 | 14% |
| > 3,000 to 4,000 | 15% |
| > 4,000 | 16% |
| Bonus: Total sales of ₹10,000 Crore over 5 years | Additional 2% |
Incentive Slabs for Component Champion and New Non-Automotive (Component) Investor Companies:
| Determined Sales Value (in ₹ Crore) | Incentives (% of Sales) |
|---|---|
| Up to 250 | 8%* |
| > 250 to 500 | 9%* |
| > 500 to 750 | 10%* |
| > 750 | 11%* |
| Bonus: Total sales of ₹1,250 Crore over 5 years | Additional 2% |
| Advanced Battery/Hydrogen Cell Components | Additional 5% |
*Note: in the fifth year these rates are multiplied by a factor of 0.9 for sales related to standard internal combustion engine components. Overall, components used in electric and hydrogen fuel cell vehicles can earn incentives between 13 percent and 18 percent, while other products get between 8 percent and 13 percent.
Eligibility
To benefit from this scheme, a company must meet specific financial and operational standards. An OEM applicant needs a group global turnover of at least ₹10,000 crore and a fixed asset investment of around ₹3,000 crore, while a component maker needs a turnover of at least ₹500 crore. New non-automotive applicants must show a global net worth of at least ₹1,000 crore.
A company must also meet the minimum new domestic investment targets over the five-year period and keep up its investment schedule to stay eligible every year. Meeting these investment and growth targets decides whether the financial support is paid out.
Minimum New Domestic Investment thresholds (₹ Crore):
| Requirement Period | Champion OEM (General) | Component Champion |
|---|---|---|
| Mar 31, 2023 | 300 | 40 |
| Mar 31, 2024 | 800 | 100 |
| Mar 31, 2025 | 1,400 | 175 |
| Mar 31, 2026 | 1,750 | 220 |
| Mar 31, 2027 | 2,000 | 250 |
Application Process
Application is done through the official website at PLI AUTO official portal. The application window is usually open for 60 days following each announcement of the scheme.
STEP 1 - Register on the official portal at pliauto.in using the company credentials. STEP 2 - Gather the financial statements, business plans and supporting documents that are listed below. STEP 3 - Submit the completed application form along with the non-refundable application fee. STEP 4 - Get the unique application ID and keep it for all future communication. STEP 5 - Wait for the Project Management Agency to review the documents and recommend the application for final approval by the Ministry of Heavy Industries.
Documents
To prepare the application, these documents should be kept ready. Keeping every paper in order makes the checking process faster and avoids delays.
- Certificate of Incorporation issued by the ROC
- PAN Card and GST Registration Certificate
- Import Export Code (IEC) certificate
- Memorandum and Articles of Association
- CIBIL report and credit history certificate
- Latest shareholding pattern of the company
- Detailed project report or business plan
- Self-certification for revenue, net worth and investment history
- Proof of application fee payment
References
Ministry of Heavy Industries - Official Website | PLI Scheme for Automobile and Auto Component Industry - Official Page | PLI AUTO Scheme and Guidelines
FAQ's
Who can apply as a participant?
Any company registered in India under the Companies Act, 2013 can apply if it is engaged in, or planning to enter, the automotive manufacturing or auto-component sectors.
What makes a company ineligible?
A company may be disqualified if its debt is marked as a non-performing asset by banks, it is listed as a willful defaulter, it is debarred by SEBI, or it is facing insolvency proceedings in the National Company Law Tribunal.
Can a company have manufacturing units in multiple locations?
Yes, a company can operate multiple facilities across India under one application.
Does the scheme support both Greenfield and Brownfield projects?
Yes, both new (greenfield) and existing (brownfield) projects are supported under this scheme.
What if a company is 100% foreign-owned?
It can still take part, as long as the company is formally registered in India.
When is the incentive received?
A company should submit its incentive claim within 6 months after the end of the financial year, or 3 months after its financial statements are audited, whichever is later.