PLI Scheme for Automobile and Auto Components — 8% to 16% Incentives

The Production Linked Incentive Scheme for the Automobile and Auto Component Industry is a Government of India subsidy programme administered by the Ministry of Heavy Industries. Its job is to expand India's ability to manufacture Advanced Automotive Technology (AAT) products and to pull fresh investment into the automotive manufacturing value chain, from vehicle makers through to component suppliers.

The scheme targets a specific problem: the cost disadvantage Indian manufacturers face when they try to build advanced automotive products at scale. By paying incentives against incremental sales, it helps approved companies reach economies of scale, build a dependable supply chain for AAT products, generate employment and shift the industry towards higher value-added output.

It operates through two windows. The Champion OEM Incentive Scheme covers manufacturers of Advanced Automotive Technology vehicles, including Battery Electric and Hydrogen Fuel Cell vehicles across all segments. The Component Champion Incentive Scheme covers auto component makers that can achieve global scale in Advanced Automotive Technology components.

Applications are accepted on a rolling basis through the official portal, and applicants are assessed by a Project Management Agency before the Ministry takes the final approval decision.

• Pays 8% to 16% incentives on incremental sales, with 2% top-ups on crossing cumulative sales thresholds
• Administered by the Ministry of Heavy Industries, Government of India
• Two tracks: Champion OEM Incentive Scheme and Component Champion Incentive Scheme
• Open to existing automotive manufacturers and new non-automotive investor companies that meet the financial thresholds
• Battery Electric and Hydrogen Fuel Cell vehicle components earn an extra 5% incentive
• Applications are accepted on a rolling basis through the official portal

Eligibility depends on which kind of applicant you are.

Existing automotive manufacturers must clear these global group benchmarks:

• Auto OEMs: minimum global group revenue of ₹10,000 crore from automotive and/or auto component manufacturing, and a minimum global group investment in fixed assets (gross block) of ₹3,000 crore.
• Auto component manufacturers: minimum global group revenue of ₹500 crore, and a minimum global group investment in fixed assets (gross block) of ₹150 crore.

New non-automotive investor companies are judged on different criteria:

• Minimum global net worth of ₹1,000 crore, based on audited financial statements as on March 31, 2021.
• A committed new domestic investment in India spread across a five-year period, on the conditions specified under the scheme.

Every applicant must keep satisfying the cumulative new domestic investment conditions each year. Where applicants are otherwise comparable, preference is given to companies that commit to front-loading their investment during the scheme period.

PLI Scheme for Automobile and Auto Components — 8% to 16% Incentives is open to startups at any stage. It is open to startups registered anywhere in India.

PLI Scheme for Automobile and Auto Components — 8% to 16% Incentives accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.

Incentives are paid as a percentage of the applicant's determined sales value, and the rate depends on which part of the scheme you qualify under.

• Champion OEMs and new non-automotive OEM investors: 13% to 16% of sales value, plus an extra 2% on reaching a cumulative determined sales value of ₹10,000 crore within five years.
• Component Champions and new non-automotive component investors: 8% to 11% of sales value, plus an extra 2% on reaching a cumulative determined sales value of ₹1,250 crore within five years.
• Battery Electric Vehicle and Hydrogen Fuel Cell Vehicle components: an additional 5% incentive.

The scheme also carries a regulatory support element. The broader purpose of the payout is to offset cost disabilities, enable economies of scale, encourage investment in Advanced Automotive Technology manufacturing and support domestic production objectives. The incentives are available over a five-year period.

PLI Scheme for Automobile and Auto Components — 8% to 16% Incentives is offered by Ministry of Heavy Industries, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

Every application goes first to the Project Management Agency (PMA), which screens and evaluates it in detail. That assessment covers compliance with the specified eligibility criteria, the applicant's financial standing, its investment commitments and its business plan for Advanced Automotive Technology manufacturing.

After the assessment, the PMA formulates its recommendations for approval and submits them through the proper channels to the Ministry of Heavy Industries (MHI), which makes the final decision. In doing so, MHI may give preference to applicants that commit to front-loading their investment during the scheme period, as judged by the Net Present Value (NPV) of the proposed investment.

MHI is expected to consider and finalise applications within 60 days from the date of submission or from receipt of any clarifications it has asked for. Once approval is granted, the PMA issues a formal approval letter to the selected applicant within 5 working days.

Before you apply to PLI Scheme for Automobile and Auto Components — 8% to 16% Incentives, keep the following documents ready:

• A pitch deck or short business plan describing the problem, product and traction
• Company registration documents and PAN
• Founder identification (PAN / Aadhaar) and brief profiles
• Recent financial statements or projections
• Product details — a demo, prototype or working link if available

Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.