The Production Linked Incentive (PLI) program for the automobile sector has been extended by one year till March 2028. Additionally, the amended rules provide additional clarity and concessions to approved applicants.
Revised stimulus timeline
Initially envisaged for five years starting from 2023-24, these incentives will now be available for the following periods:
2023-24: Investment year
- 2024-25 to 2027-28: Disbursement against sales limit for five consecutive years
- The extension allows companies more time to avail PLI funds worth Rs 25,938 crore to boost domestic manufacturing and exports.
Relaxation in eligibility criteria
- If participants fail to meet the year-on-year growth criteria for payout in any financial year, they will continue to be eligible for the next year’s incentive if the target is achieved.
- This protects serious investors who have prioritized capacity establishment upfront.
- Furthermore, it is sufficient to meet the targets for five out of six years to receive the overall subsidy.
Analysis
- The move signals the government’s adaptive support for strategic sectors like auto even amid economic uncertainties.
- Extending the PLI period and introducing appropriate safeguards enhances industry confidence while ensuring rigorous monitoring of public funds.
- By providing policy stability along with practical concessions, India aims to strengthen its position in global automotive supply chains.