Govt to announce PLI scheme for automobile sector, allocate Rs 57,000 cr

1 Govt to announce PLI scheme for automobile sector, allocate Rs 57,000 cr

Chennai: The government is backing localisation and reduced import dependency for the auto sector by announcing a big ticket PLI scheme. “The department of heavy industries is in the final stage of announcing the PLI scheme and the highest budget allocation of Rs 57,000 crore for the sector,” said union heavy industries minister Mahendra Nath Pandey while speaking at the 61st annual session of the Automotive Component Manufacturers Association (ACMA). The minister set an ambitious export and employment target for the auto component industry asking it to double its exports to $30 billion in the next 5 years and increase employment in the industry from 50 lakh right now to 75 lakh by 2025.
The government also exhorted the auto industry to localise and cut down Chinese import-dependence particularly of electronic, electrical and semiconductor components. “The auto component industry should indigenise the making of electric vehicle components and India should not become a major importer of electric vehicle (EV) components like it is with the solar industry,” said Amitabh Kant, CEO, Niti Aayog. “As global auto companies diversify their supply chain they are looking for sourcing hubs outside China and India has a huge opportunity there,” he added. Even as he stressed the EV transition, he also highlighted the importance of reducing China dependence on internal combustion engine vehicles as well. “As auto companies ramp up production, they need to boost localisation and reduce dependence on imports particularly from China of parts like catalytic converters, electronic and electrical parts, semiconductor and other critical components,” he added. For its part, auto companies stressed the need for consolidated investments in critical areas like semiconductors. SIAM president Kenichi Ayukama said: “The semiconductor shortage has impacted our industry last year and continues to be a big challenge this year. Semiconductor manufacture requires huge investment. Indian auto industry alone cannot ensure the viability of such a huge investment. Hence there is a need for consolidation across sectors.” “The localisation road map made by SIAM and ACMA can succeed only with full support from the government,” he added. Hyundai Motor India MD & CEO SS Kim outlined his company’s manufacturing plans saying that Hyundai’s India specific operations will focus on zero emissions vehicles, maximum customisation, market relevant and human centric technology and prepare for uncertainties due to dynamic business conditions.


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