Govt wants to certify all automotive PLI applicants by July

New Delhi: The Union ministry of heavy industries, which implements the government’s production-linked incentive (PLI) scheme for advanced automotive technologies, is aiming for all the 85 applicants to receive the approval certification against the scheme’s domestic value-addition (DVA) criteria by July 2024, its secretary Kamran Rizvi said.

“We are confident our PLI scheme will clear any audit in terms of how properly we are implementing it. Our target is that all 85 applicants should have the certification by July 2024,” Rizvi said at a gathering of automotive industry stakeholders on Tuesday.

Further, a meeting of component applicants to facilitate domestic value-addition (DVA) applications for automotive suppliers that have yet to secure any DVA certifications, is likely to be called soon by the ministry’s additional secretary Hanif Qureshi.

Qureshi said eight original equipment manufacturers (OEMs) have applied for the DVA certification so far for 39 products, of which approvals have been given for 22 products by three OEMs, while 11 certifications are still in process. Similarly, 25 product approvals are under process for DVA certification by automotive component suppliers, though no approval has been granted so far.

The ministry of heavy industries (MHI) has stated that it will begin the disbursal of incentives under the scheme in FY25. It is yet to determine a process for incentive claims for approved applicants. Suman Mishra, chief executive of Mahindra Last Mile Mobility, said that while the company has 10 approvals for its vehicles in place, the company urges the government to quickly finalize the standard operating procedure (SOP) for claiming incentives.

All participants in the automotive PLI scheme are required to prove a minimum of 50% domestic value addition in their product and supply chain to be eligible for incentives under the scheme, a stringent assessment that is made by government-affiliated testing agencies such as Automotive Research Association of India (Arai), which are also monitored by the Comptroller and Auditor General of India to ensure strict adherence to the rules and requirements laid down under the provisions of the scheme.

Of the 67 automotive parts makers and 18 OEMs that have been selected as beneficiaries of the scheme, only Tata Motors and M&M have received localization certifications from the government-run testing agency Arai for a range of products with electric powertrains.

The incentives will be awarded against evidence of actual sales and audits of the investment made in advanced automotive technologies.

A large number of companies have been unable to submit the necessary documentation involving detailed data of local sourcing at the tier-1, tier-2, and tier-3 levels, required to be signed off by statutory auditors, in time to become eligible for certifications because of complexities in the application process.

IFCI, a project management agency, has been appointed to oversee the scheme’s implementation and an SOP for DVA has been released to guide the beneficiaries, Mahendra Nath Pandey, Union minister for heavy industries had said in a reply to parliament last month, adding that as part of monitoring and ensuring compliance, the government conducts periodic visits to the manufacturing plants of the approved beneficiary companies and undertakes quarterly reviews of the scheme’s progress.