Ratings agency ICRA said the recently-announced production linked incentive (ꦉPLI) schemes will kick start investments in advanced auto technologies and enable the creation of a cond♎ucive electric vehicle system.
Indigenous supply chains
ICRA in its press release on Tuesday said that 🎃the PLI schemes endeavours to make the co🌺untry future-ready and competitive in the global automotive arena. It does so by fast-tracking investments in technology and components where the country needs to leapfrog.
"It aims to promote indigenous global supply chain of advanced automotive technology products wh💙ich is low compared to that globally. As tier-Is scale up, the tier-IIs will also benefit, resulting in a multiplier effect and cost competitiveness," the ratings agencไy said.
Competitive on the global front
The measures annou𒁃nced in the scheme bear the potential to make India an export hub in the global auto supp🦄ly chain and increase cost competitiveness, ICRA stated.
Further, the scheme has the potential to attract foreign investments into India by capital🔯izing on global economics de-risking their supply chains, the ratings agency stated. "The production and export of advanced automotive components will also help compensate the potential loss of revenues from traditional components to an extent as overseas markets move into EVs in the future," said ICRA's Assistant Vice President and Sector Head Vinutaa S.
India has the potential to leapfrog from fossil-fuel based automobiles to green transportation
The ratings agency said the auto✨motive sector has b🅷een one of the key beneficiaries of the PLI scheme.
It added that India has the potential to leapfrog from fossil-fuel based automobiles to green transportation with the current PLI scheme combining with erstwhile policies as FAME-II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicle-II), PLI for ACC batteries and the State EV policies. While the State 🎃EV policies would facilitate the demand side, the PLI scheme for ACC batteries would enable asཧsurance on the supply side.
The Union Cabinet on September 15, cleared a production-linked incentive scheme worth Rs 26,058 crore aimed at amplifying automobile production in the country wit💎h a speciﷺal focus on electric vehicles. Incentives worth Rs 26,058 crores would be provided over a period of five years.
