Why India’s auto PLI is yet to pick up after two years

livemint.com:

MUMBAI : The production-linked incentives (PLI) scheme for the automotive sector has hit another speed breaker due to lack of clarity about the process to apply for subsidies, multiple industry executives said. The government is still working on the standard operating procedures (SoPs) for claiming incentives, nearly two years after the scheme became operational, the people said on the condition of anonymity. The SoPs are expected to outline the process for verifying sales and investments made as part of the scheme and the format of various certificates, undertakings and documents that applicants need to produce.

It will also prescribe a standardized procedure for testing agencies to verify the claims. This is the second time that the auto PLI scheme has been delayed; earlier, the SoPs for calculation of domestic value addition—a key criterion for the scheme—were released over a year after the scheme became operational. In the absence of that SoP, none of the applicants were able to file claims for the first year of the scheme ending March 2023.

Subsequently, the government extended the scheme duration by one year to compensate for zero disbursals in the first year. While the industry awaits new SoPs, it has also been bogged down by the sheer volume of documents and compliances required. For instance, companies need multiple certificates from chartered engineers, independent auditors and their managements to back the claims they make.

This is unlike most other PLI schemes, where companies are simply required to submit an undertaking to back their claims, experts said. The auto PLI scheme is also the only such scheme for which SoPs are in place to calculate domestic value addition, they said. Queries sent to the heavy