BUSINESS

Cabinet clears PLI worth Rs 26,000 crore to automobile, drone industry

The Union Cabinet on Wednesday gave a nod to a PLI scheme for the automobile industry to boost production as well as give a push to the sector. The scheme will incentivise the emergence of Advanced Automotive Technologies global supply chain in India.

Incentives worth Rs 26,058 crore will be provided to the automobile sector to increase the production of components like cars, auto parts, and other related products in India. 

Briefing media about the Cabinet decision, Union Minister Anurag Thakur said the PLI scheme has a budgetary provision of Rs 26,058 crores – Rs 25,938 crores for the auto sector and Rs 120 crores for the drone industry.

“Automobile industry contributes to 35 per cent of the manufacturing GDP of the country. It is a leading sector in generating employment. If we speak of the global automotive trade, then we need to increase India’s participation,” said Thakur.

Thakur said the PLI scheme has been brought keeping in mind the “needs of the present as well as the future, and for local markets too, so that we strengthen our industry.”

In financial parlance, a PLI scheme provides incentives to the industry for boosting domestic production to lessen imports.

Additionally, the PLI scheme for drones will bring fresh investments of over Rs 5,000 crore in three years and incremental production of over Rs 1,500 crore

Last year, the government announced the PLI scheme for the vehicle and vehicle parts sector. An amount of Rs 57,043 crore was kept under this scheme in five years.

Notably, buying in auto stocks was seen from this morning before the cabinet meeting.

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