Govt releases new SOPs for Auto PLI

The Standard Operating Procedures (SOPs) will reduce the compliance burden on the applicants and promote faster applications and the disbursal of incentives under the scheme

April 28, 2023

This initiative is aimed at promoting skill development and entrepreneurship in the country

It is expected to attract significant investments and help India become a global hub for automobile manufacturing

According to the PLI scheme guidelines, applicants must achieve a domestic value addition (DVA) of 50% to claim incentives under the scheme

The PLI-Auto Scheme proposes financial incentives to boost domestic manufacturing of advanced automotive technology (AAT) products

The Ministry of Heavy Industries has recently announced the release of Standard Operating Procedures (SOPs) under the PLI schemes for the automobile and auto component industries.

These new procedures will allow applicants under the scheme to submit their applications for testing and certification of advanced automotive technology (AAT) products, including Original Equipment Manufacturers (OEMs) and components, which will help them qualify for incentives under the PLI schemes. According to a statement from the Ministry, this will reduce the compliance burden on the applicants and promote faster applications and the disbursal of incentives under the scheme.

Experts said that with the SOPs, the ministry aims to boost the domestic manufacturing sector and reduce dependence on imports, thereby creating more job opportunities. Additionally, the initiative is aimed at promoting skill development and entrepreneurship in the country, and it is expected to attract significant investments and help India become a global hub for automobile manufacturing.

According to the PLI scheme guidelines, applicants must achieve a domestic value addition (DVA) of 50% to claim incentives under the scheme. To calculate DVA, a committee headed by Director ARAI Pune was constituted with members comprising all testing agencies who drafted the SOP after deliberating on all the suggestions received from the stakeholders. onsultations were also held with all 85 applicants for the PLI scheme. The Centre has made efforts to devise simple procedures with the minimum paperwork needed to file an application under the PLI scheme, thereby promoting ease of doing business.

In case there are unforeseen circumstances preventing compliance with all provisions contained in the SOP, the testing agencies have been given the power to relax the provisions of the SOP, enabling a flexible approach to the resolution of issues that may arise in the complex supply chain of the automotive industry.

The PLI-Auto Scheme proposes financial incentives to boost domestic manufacturing of AAT products and attract investments in the automotive manufacturing value chain. The scheme has two parts: Champion OEM, which will make electric or hydrogen-powered vehicles, and Component Champions, which will make high-value and high-tech components. The key objectives of the Production Linked Incentive (PLI) Scheme for Automobiles and Auto Components are to provide financial incentives to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain.

Source: Mint

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