The Centre on Tuesday said investments worth ₹35,657 crore have already been made under the Production Linked Incentive (PLI) scheme for the automobile sector, against the projected ₹42,500 crore, even as disbursements under the scheme remained relatively low at ₹2,321 crore till December 2025.
Enforcement Phase
A senior government official said the government plans to invoke the ₹1 crore bank guarantees submitted by applicants that have failed to make any investment under the scheme so far. “There are 10 such players. Their bank guarantees will be invoked,” the official said.
Explaining the gap between investment and incentive payouts, the official said most original equipment manufacturers (OEMs) have already committed substantial capital but become eligible for incentives only gradually as production thresholds and localisation norms are met. As a result, disbursement from the total scheme outlay of ₹25,938 crore has remained modest.
So far, only six OEMs—Tata Motors, Mahindra & Mahindra, Bajaj Auto, TVS Motor Company, Ola Electric, and Toyota Kirloskar Auto Parts—have received incentives under the scheme. The official added that incentives would be disbursed to four more OEMs in the current financial year.
“Six OEMs have received incentives so far, and around ₹40 crore will be disbursed to about four OEMs during this financial year,” the official said.
While the scheme has incentivised production of around one million units in volume terms, value gains have been concentrated among passenger vehicle makers, despite incentives being linked to just 79,540 units in that segment.
In FY2024–25, incentives worth ₹322 crore were disbursed to four approved applicants. For the performance year FY2024–25, a total of ₹1,999.94 crore has so far been disbursed to five approved applicants.
Localised Innovation
The PLI Auto scheme incentivises only products that achieve a minimum domestic value addition (DVA) of 50%. To date, eight applicants under the Champion OEM category have received DVA certification for 94 vehicle variants. These include models from Mahindra & Mahindra, Tata Motors, Bajaj Auto, TVS Motor Company, Ola Electric Technologies, Eicher Motors, Pinnacle Mobility Solutions, and Hero MotoCorp.
Under the Component Champion category, 10 applicants have received DVA certification for 37 variants. These include components such as transaxles, traction motors, hub motor–integrated wheel rims, engine management systems, dual-clutch transmissions, angle encoders, onboard chargers, and urea dosing modules for BS VI applications.
