India’s PLI Auto scheme sees modest start with ₹500 crore claims in FY24, industry anticipates surge by FY26

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Subscribe to enjoy similar stories. The first wave of claims for India's automobile production incentives scheme barely touched ₹500 crore, an amount that may grow exponentially in the years ahead as the electric revolution unfolds and more products secure certification. Just four companies—Tata Motors, Mahindra Last Mile Mobility, Toyota Kirloskar Auto Parts (TKAP) and Ola Electric—submitted claims for FY24, two people aware of the matter said.

The production-linked incentives (PLI) scheme for advanced automotive technologies, launched in 2021, has an ambitious outlay of ₹26,000 crore. However, government officials and industry experts expect a surge in claims from FY26 as locally made electric cars and larger vehicles enter the market, likely using up the entire fund allocated for the scheme till FY28. Tata Motors and Mahindra Last Mile Mobility have each submitted claims for close to ₹100 crore, the people cited above said on the condition of anonymity, adding disbursements are likely to begin by the end of the year.

Queries emailed to the two companies as well as the ministry of heavy industries remained unanswered. The PLI scheme, which covers both automakers and component makers, was designed to stimulate production in advanced automotive and EV sectors by providing financial incentives to companies meeting set localization and sales criteria. So far, 81 companies have enrolled for the five-year scheme.

“The 50% domestic value requirement is essential to encourage local production, but it’s a high bar for component manufacturers, especially in the first year. Some manufacturers need more time to adjust their supply chains to comply fully," an industry executive said on the condition of anonymity. For smaller auto