PLI Schemes Have Created Deep Localisation, Says Union Heavy Industries and Steel Minister HD Kumaraswamy

The PLI schemes have played a significant role in boosting the adoption of EVs. By offsetting the high manufacturing costs, they have provided a major impetus to both established and emerging OEMs [original equipment manufacturers] in the country, making domestic EV production more viable.

The PLI auto scheme, with an outlay of ₹25,938 crore, has enabled component manufacturers as well as OEMs to manufacture advanced auto technology components and global quality-level EVs. Seventeen manufacturers have achieved the 50% DVA [domestic value addition] threshold required and have been given more than 107 PLI certificates for their products.

The PLI schemes have created deep localisation of advanced automotive technology [AAT] components, creating a robust domestic supply chain and reducing dependence on imports. Standard operating procedures [SOPs] for determining DVA and for claim filings have improved ease of doing business.

The PLI auto scheme incentivises manufacturers by providing 13–18% of determined incremental sales value of AAT vehicles under the Champion OEM category, and 7.2–13% for AAT components under the Component Champion category. Crucially, it mandates a minimum DVA of 50%, encouraging deep localisation of manufacturing within India.

The PM E-DRIVE scheme complements this by offering upfront subsidies to EV buyers and enforcing a PMP [phased manufacturing programme] to ensure progressive indigenisation of EV components.

The PMP sets clear timelines and requirements for producing critical parts and essential EV components within India. This approach allows manufacturers to progressively build and deepen local supply chains.

The ministry supports the EV ecosystem in India through multiple targeted schemes addressing technological and supply chain challenges while promoting production and innovation.

PLI ACC [advanced chemistry cell] supports large-scale manufacture of ACCs in India to reduce import dependence, offering financial incentives to cell manufacturers. The payment security mechanism [PSM] is a dedicated fund to mitigate payment risks for electric bus operators and OEMs. The mechanism requires STUs/SPVs [state transport undertakings/special purpose vehicles] to maintain escrow accounts for due payments; if payments are delayed or missed, operators can invoke the PSM to receive funds from the dedicated scheme corpus.

Launched in 2024 with a ₹10,900-crore outlay, PM E-DRIVE incentivises the purchase of over 28 lakh EVs including e-2Ws, e-3Ws, e-buses, e-trucks and e-ambulances.

The Scheme to Promote Manufacturing of Electric Passenger Cars in India [SPMEPCI] was notified in 2024. It supports EV passenger-car manufacturing with customs-duty concessions and requires setting up production units with increasing DVA targets.

Under the PLI auto scheme, AATs including hydrogen-fuel cell vehicles and flex-fuel vehicles are eligible for incentives. Hybrid vehicles received support under the earlier FAME [Faster Adoption and Manufacturing of Electric Vehicles in India] II scheme, catalysing their adoption in public and commercial segments.

The PM E-DRIVE scheme also supports hybrid ambulances, exemplifying the ministry’s commitment to practical application of hybrid technology.

For cell manufacturing, the PLI ACC scheme offers substantial financial support to scale up local cell-production capacity. Charging infrastructure development is promoted under the PM E-DRIVE scheme with a ₹2,000-crore fund support.

Advanced motor technologies receive support under the PLI auto scheme, which incentivises domestic manufacturing with a focus on incremental sales and a mandatory minimum 50% DVA. The SPMEPCI scheme also requires significant investments with phased domestic value-addition targets, encouraging large-scale infrastructure and R&D investment.