PLI Auto Scheme: Automobile & Auto Component Industry
The PLI Auto Scheme — full name Production Linked Incentive Scheme for Automobile and Auto Component Industry — is the Government of India's flagship push to make the country a global hub for Advanced Automotive Technology (AAT) products. Approved by the Union Cabinet on 15 September 2021 with a budget of ₹25,938 crore, the scheme runs for five years from FY 2022-23 to FY 2026-27 and is anchored on Zero Emission Vehicles such as Battery Electric and Hydrogen Fuel Cell vehicles. If you are an automobile manufacturer, an auto-component maker, or a supplier eyeing the EV value chain, this is the central incentive layer to know.
Quick Glance
Scheme PLI Auto · Outlay ₹25,938 cr · Tenure 5 yrs (FY23–FY27) · Focus ZEV & AAT · Run by MHI
What is the PLI Auto Scheme
The PLI-AUTO Scheme is administered by the Ministry of Heavy Industries (MHI), Government of India. Its core mandate is to boost domestic manufacturing of Advanced Automotive Technology products and to push deep localisation across the auto value chain. The scheme rewards manufacturers with cash incentives linked to their incremental sales of AAT products, with the explicit goal of building both domestic capacity and a globally competitive Indian supply chain.
Incentives accrue over the five financial years from FY 2022-23 to FY 2026-27, while disbursements happen in the subsequent year — that is, from FY 2023-24 to FY 2027-28. This staggered design lets MHI verify each year's performance before paying out the incentive against verified incremental sales.
What is Eligible — AAT and Zero Emission Vehicles
The scheme defines eligibility around two ideas: Advanced Automotive Technology products and Zero Emission Vehicles.
ZEVs covered include Battery Electric Vehicles (BEVs) and Hydrogen Fuel Cell Vehicles. Internal combustion engine products are not the focus — the scheme is purposely tilted toward future-ready powertrains. AAT extends further into electronics, advanced safety systems, and components that aren't easily produced under existing capacity in India. The scheme is structured to favour applicants who commit to deep localisation rather than assembly-only operations.
Who Should Care
The PLI Auto Scheme is built for two broad audiences. The first is original equipment manufacturers (OEMs) — companies that design and assemble vehicles, especially those entering or scaling EV production. The second is auto-component suppliers, including new entrants planning to manufacture AAT components like power electronics, drivetrain parts, or fuel-cell stacks within India.
Applications and disbursements are tracked via the dedicated PLI Auto Portal, where manufacturers register, file annual claims, and check the status of incentive disbursements.
Key Highlights
Outlay: ₹25,938 crore over five financial years.
Approval: Union Cabinet, 15 September 2021.
Scheme period: FY 2022-23 to FY 2026-27.
Disbursement period: FY 2023-24 to FY 2027-28.
Focus: Advanced Automotive Technology products and Zero Emission Vehicles.
Administered by: Ministry of Heavy Industries, Government of India.
Common Mistakes Suppliers Make About PLI Auto
These are the misconceptions that derail otherwise-eligible proposals — keep them top of mind before you submit:
Treating it as a generic auto incentive. PLI Auto is exclusively for Advanced Automotive Technology products. Conventional ICE engines and traditional auto-components produced at scale in India do not qualify.
Confusing PLI Auto with PLI ACC. PLI Auto covers vehicles and AAT components; PLI ACC is a separate MHI scheme for Advanced Chemistry Cell battery storage. Cell manufacturers need to look at PLI ACC, not this scheme.
Missing the one-year lag between sales and disbursement. Sales counted under the scheme are between FY 2022-23 and FY 2026-27, but the cash actually arrives in the year after — a CFO building cash-flow projections must model that lag.
Equating Hydrogen ICE with Hydrogen Fuel Cell. Only Fuel Cell vehicles are ZEVs under this scheme; hydrogen-burning internal-combustion-engine vehicles are not eligible.
Skipping the deep-localisation requirement. The scheme's design penalises applicants whose value addition is mostly imported. Without a credible localisation roadmap, an application will not score competitively.
Frequently Asked Questions
What does Advanced Automotive Technology (AAT) mean under this scheme?
AAT refers to the next generation of automotive products and components — Zero Emission Vehicles (Battery Electric and Hydrogen Fuel Cell), advanced powertrains, electronics and safety systems where existing domestic capacity is limited. The scheme is targeted at building manufacturing depth in these technologies, not at conventional ICE products.
Are Battery Electric and Hydrogen Fuel Cell Vehicles both covered?
Yes — both Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles fall within the Zero Emission Vehicle definition this scheme is anchored on. Hydrogen ICE vehicles, however, do not qualify as ZEVs.
Does the PLI Auto Scheme cover auto-component suppliers as well?
Yes — the scheme name explicitly includes the Auto Component Industry. Component manufacturers producing Advanced Automotive Technology parts are eligible, with the same emphasis on deep localisation that applies to vehicle OEMs.
How does PLI Auto differ from PLI ACC and FAME-II?
PLI Auto rewards manufacturers of vehicles and AAT components, while PLI ACC is a separate Ministry of Heavy Industries scheme for Advanced Chemistry Cell battery storage manufacturing. FAME-II is a demand-side incentive that rewards EV buyers, not manufacturers — so an OEM may benefit from PLI Auto on the supply side and FAME-II on the demand side.
Important Links
Official Portal: https://pliauto.in/
The portal above hosts the following sub-services as tabs:
Scheme Information — the full PLI Auto guidelines, eligibility, and incentive structure.
Application & Registration — for manufacturers entering the scheme to register and submit proposals.
Claim Filing — annual incentive claim submission against verified incremental sales.
Disbursement Tracking — status of approved claims and incentive release.
To reach any of these, open the portal and click the relevant tab on the home page.
Source
Source: https://heavyindustries.gov.in/en/pli-scheme-automobile-and-auto-component-industry
Final Words
The PLI Auto Scheme is the Government of India's headline bet on becoming a global hub for electric and hydrogen-fuel-cell vehicles — backed by a serious ₹25,938 crore commitment and run with deep-localisation conditions baked in. For OEMs and component manufacturers planning India-scale EV manufacturing, it is the single most important MHI scheme to align your roadmap with. For the latest updates, keep visiting SarkariWorld.org.