chennai the recently announced productionlinked incentive pli scheme with an outlay of rs 25938 crore has the potential to make india an export hub in the global auto supply chain and increase cost competitiveness said icra the union ministry of heavy industries estimates that the scheme has potential to bring fresh investments of over rs 42500 crore and result in incremental production of over rs 23 lakh crore as per an icra note the scheme aims for a futureready and globally competitive indian auto sector by fasttracking investments in technology and components where india needs to leapfrogthe pli incentives are saleslinked and are expected to range from 1318 on determined sales values for oems and 813 of determined sales values for auto component manufacturers an additional 5 is to be given for manufacturing components for battery electric vehicle and hydrogen fuel cell vehicles it will be effective from fy2023 for five years vinutaa s assistant vicepresident and sector head icra limited said the pli scheme will increase localisation accelerate investments towards a local ev ecosystem and has the potential to make india an export hub in the global auto supply chain it aims at promoting indigenous global supply chain of advanced automotive technology products which is low compared to that globally as tieris scale up the tieriis will also benefit resulting in multiplier effect and cost competitiveness the scheme is also likely to attract foreign investments into india capitalizing on global economies derisking their supply chains the production and export of advanced automotive components will also help compensate potential loss of revenues from traditional components to an extent as overseas markets move into evs in the futurethe automotive sector has been one of the key beneficiaries of the pli scheme along with the fameii the state ev policies on the demand side and earlier announced pli for acc batteries on the supply side the current pli scheme will enable india to leapfrog from fossilfuel based automobile to green transportation it will also lead to promotion of next generation safety technologies to make indian automobile and roads saferthe eligibility for existing domestic and global auto and auto component players to apply for incentives under the pli scheme is contingent on committed fresh investments group turnover and group fixed assets new nonautomotive investors with a global net worth of rs 1000 crore and a clear business plan for investment in advanced automotive technologies are also eligiblevinutaa said the pli will accelerate indias transition into new technologies incumbent oems will benefit from the scheme most midsize auto component suppliers supplying or targeting to supply advanced technology components will gain from the scheme however ice vehicle manufacturing is largely excluded for incentives and some ev startups may be at a disadvantage if they do not scale up going forward