Mahindra & Mahindra and Tata Motors Secure Rs 246 Crore Incentive Under PLI Scheme
The Ministry of Heavy Industries has approved incentive claims totaling Rs 246 crore submitted by Mahindra & Mahindra (M&M) and Tata Motors under the government’s Rs 25,938 crore Production-Linked Incentive (PLI) scheme for the automobile and auto components industry. The scheme aims to boost the domestic manufacturing of advanced automotive technology (AAT) products and has already shown positive results, with major participation from original equipment manufacturers (OEMs).
H.D. Kumaraswamy, Minister for Heavy Industries and Steel, expressed satisfaction with the automotive sector’s progress in enhancing localized manufacturing capabilities. He lauded Tata Motors and Mahindra & Mahindra for their contributions to this growth and expressed optimism that other industry players would follow suit, benefiting from the PLI scheme.
Tata Motors claimed an incentive of approximately Rs 142.13 crore, based on the sales of AAT products in FY 2023-24. The eligible sales include their electric vehicle offerings such as the Tiago EV (electric four-wheeler), Starbus EV (electric bus), and Ace EV (electric cargo vehicle), which together amounted to Rs 1,380.24 crore.
Mahindra & Mahindra, on the other hand, submitted an incentive claim of Rs 104.08 crore, reflecting incremental sales of AAT products totaling Rs 800.59 crore in FY 2023-24. This includes sales of their electric three-wheeler models like the Treo, Treo Zor, and Zor Grand, amounting to Rs 836.02 crore, with a certificate of domestic value addition (DVA) from the Automotive Research Association of India (ARAI).
The Ministry of Heavy Industries has thoroughly reviewed and approved the claims, with recommendations from the Project Management Agency (PMA). These approved claims highlight the growing success of the PLI scheme, which was launched in September 2021 to promote India’s manufacturing capabilities in electric vehicles and hydrogen fuel cell technologies.
The PLI scheme is expected to run from FY 2023-24 to FY 2027-28, with disbursements beginning in FY 2024-25. Incentives for electric vehicle and hydrogen fuel cell components range from 13-18%, while other AAT components will receive 8-13%. The scheme mandates a minimum of 50% domestic value addition, applicable to both domestic and export sales.
As of September 2024, the scheme has already facilitated investments totaling Rs 20,715 crore, leading to incremental sales of Rs 10,472 crore. The first incentive disbursements are expected to further accelerate the development of India’s electric vehicle and AAT manufacturing ecosystem.
