How PLIs can help India leapfrog to green mobility

Contact Counsellor

How PLIs can help India leapfrog to green mobility

  • A  thrust  on  rapid  transition  to  green  vehicles  with  lower and ultimately, zero carbon emissions, has presented an opportunity for India’s auto sector to leapfrog to new technologies.
  • Production-linked incentive (PLI) schemes for this sector can play a big role in this aspect.

Role of PLI schemes in transition to Green Mobility

  • The auto sector represents nearly half of India’s manufacturing gross domestic product (GDP).
  • However, indigenous production of auto components or technologies has not helped the industry move up the technological value-add  ladder.
  • As India and the world transition to green technologies and as global supply chain disruptions lead original equipment manufacturers (OEMs) to explore a ‘China + 1’ sourcing model
  • India is presented with a unique opportunity to build cutting-edge domestic capabilities in these areas, develop skill, overcome cost disabilities, create economies of scale, and build a robust supply chain.

Ways to build  green  ecosystem

  • Local production of advanced and future-ready automotive technologies requires an ecosystem
  • Financial sops under three different PLI schemes—the PLI scheme for automobiles and auto components, the advanced chemical cell (ACC) battery storage scheme, and the scheme for the development of a semiconductor manufacturing ecosystem
  • These schemes directly and indirectly address the issues of encouraging local production of new technologies such as battery electric vehicles (BEVs), hydrogen fuel cells, and advanced auto components.

Beneficiaries of the schemes

  • The  Centre  will  extend incentives to existing players, startups, non-automotive or non-energy players in the battery production PLI scheme.
  • In the PLI scheme for advanced automotive technologies, incentives will be for established foreign and domestic OEMs and new non-auto investors.


  • The  PLI scheme enforces a  positive bias towards technology-led capacity enhancement and it can be effectively be read as a "tech-led incentive scheme" for transition to green mobility and sustainable future for auto sector.