Centre releases SOPs under PLI Auto to boost local manufacturing, cut imports

The Ministry of Heavy Industries on Thursday announced the release of standard operating procedures (SOP)s under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry to testing agencies. The PLI-Auto Scheme proposes financial incentives to boost domestic manufacturing of advanced automotive technology (AAT) products and attract investments in the automotive manufacturing value chain.
The scheme has two parts — Champion OEM to make electric or hydrogen-powered vehicles and Component Champions which will make high-value and high-tech components. With this move, applicants under the scheme can now submit their applications for the testing and certification of AAT products (both OEMs and components), which will help them qualify for incentives under the PLI Auto scheme.
The draft SOP consists of a desk appraisal and field visits to the applicants and their suppliers’ manufacturing facilities, a techno-commercial audit of the applicants, and a periodic surveillance assessment, which would provide a greater level of assurance to all the stakeholders. The SOP specifies procedures for the same in sufficient detail. These SOPs are seen as key to promote skill development and entrepreneurship in the country,  boost domestic manufacturing, reduce dependence on imports and thereby creating more job opportunities for Indians. The scheme is expected to attract significant investments and help India become a global hub for automobile manufacturing.
The Ministry notified the PLI Scheme for Automobile and Auto Component Industry on 23 September, 2021, with a budgetary outlay of Rs 25,938 crore and, on November 9, 2021, it notified the categories of 19 AAT vehicles and 103 AAT components that shall be covered under the scheme. These components are either advanced or latest-technology automotive components, those for which the supply chain is non-existent in India, or both. Thus, with this scheme, India will be able to increase its share in the global advanced technology and automotive supply chains.
According to the scheme guidelines, applicants must achieve a Domestic Value Addition (DVA) of 50 per cent to claim incentives under the scheme.