New Delhi, Sep 15 (PTI) Automobile industry on Wednesday said the Production Linked Incentive (PLI) Scheme for the sector would contribute towards reducing carbon emissions and oil imports and help in creating a self-reliant, globally competitive and future ready automotive sector.

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Auto industry body SIAM President Kenichi Ayukawa in a statement noted that the Rs 25,938 crore allocation for the industry is the highest of all PLIs announced by the government so far.

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The scheme shows the government's commitment to support Indian auto industry by incentivising battery electric and hydrogen vehicles and selected auto components, he stated.

It reinforces the government's focus on encouraging local investments and manufacturing, thereby building an Atmanirbhar Bharat, Ayukawa said.

"The scheme will contribute towards reducing carbon emissions and oil imports with local manufacturing. SIAM will be happy to engage with the Ministry of Heavy Industries for detailing and fine-tuning, execution and further strengthening the scheme," he added.

Auto components makers' body ACMA said the scheme envisions creation of a self-reliant, globally competitive and future ready Indian automotive sector.

"Thrust on incentivising new age technologies will facilitate creation of a state-of-the-art automotive value chain in the country and give a much-needed impetus to manufacturing of cutting edge automotive products in India.Further, with global economies de-risking their supply chains, the PLI will aid India in developing into an attractive alternative source of high-end auto components," ACMA President Sanjay Kapur said.

The Union Cabinet on Wednesday approved a Rs 26,058 crore production linked incentive (PLI) scheme for auto, auto-components and drone industries to enhance India's manufacturing capabilities.

The PLI scheme will incentivise the emergence of advanced automotive technologies' global supply chain in India. Incentives worth around 26,000 crore will be provided to industry over five years.

It is estimated that over a period of five years, the PLI scheme for the automobile and auto components industry will lead to fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.

The PLI scheme for automobile and drone industries is part of the overall announcement of PLI schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs 1.97 lakh crore.

The country's largest automaker Tata Motors termed the PLI scheme both progressive and transformational.

"This scheme is both progressive and transformational. It reiterates India's holistic commitment to a sustainable future and accelerates the country's progress towards green mobility," Tata Motors Executive Director Girish Wagh said.

Encouraging production of auto components using advanced technologies will boost localisation, domestic manufacturing and also attract foreign investments, he added.

Tata Motors President Passenger Vehicle Business Unit Shailesh Chandra said the scheme promotes manufacturing, export of electric vehicles and those running on hydrogen fuel cells, their supporting infrastructure, as well as new technology auto parts requiring advanced production techniques.

Mahindra & Mahindra MD & CEO Anish Shah noted that the scheme would drive faster acceptance of sustainable mobility solutions."India promises to be one of the largest EV markets in the world. This scheme is a giant step in the right direction."

Toyota Kirloskar Motor Vice Chairman Vikram Kirloskar said the scheme will be instrumental in providing the desired impetus for 'Make in India' thereby reducing imports, and enabling the Indian automotive industry to move up the value chain into higher value-added technologies.

"Above all, it will help attract global investments as several automotive players are looking to diversify their supply chains owing to the pandemic and emerging geopolitical scenarios," he added.

Ashok Leyland MD & CEO Vipin Sondhi said the scheme provides incentives for incremental performance by the OEMs, as manufacturers move towards making India a strong hub for electric mobility while also looking at harnessing the potential of Hydrogen energy for automotive applications.

"This scheme is being announced at an opportune time for India as the auto industry realigns its supply chain globally. India can therefore capitalise on this changing scenario, to become an integral manufacturing base for the world," he added.

Echoing the sentiments, TVS Motor Company Chairman Venu Srinivasan stated that focus of PLI scheme on alternative fuels, electric vehicles and utilisation of advanced technological innovation, will help the industry move faster towards the future technologies.

"There is a sense of haste in developing these technologies in India and this scheme gives the right impetus to the industry to move rapidly in that direction," he noted.

Ola Co-Founder Bhavish Aggarwal tweeted: "What a momentous occasion with the Auto PLI approval by Cabinet! India will become a global EV hub thanks to this visionary step!India is ready to reject petrol and fully commit to electric!"

Daimler India Commercial Vehicles (DICV) Managing Director & CEO Satyakam Arya said the initiative will encourage investment in vital technologies related to sustainability, carbon neutrality and more.

SKF India Managing Director Manish Bhatnagar said the PLI scheme is poised to bolster the manufacturing of EVs and hydrogen fuel vehicles in India, and the industry will benefit from such a move.

Hero Electric MD Naveen Munjal said the outlay for OEM makers and other incentives on manufacturing auto components that help making transportation cleaner will encourage investments and further drive localisation.

This will further help bring down the cost of manufacturing thereby benefiting the consumer, the industry and the environment, he added.

Industry bodies like CII and FICCI also hailed the PLI scheme.

"To build domestic supply chains for EV, large supply chain investments are required. Clear policy directive with clear milestones for transition to EV as envisaged under PLI will drive further investment in EV sector," FICCI Electric Vehicle Committee Chairperson Sulajja Firodia Motwani said.

CII Director General Chandrajit Banerjee said the scheme would add to the country's cost competitive value chain, de-risk the supply chains and go a long way in developing the country as a world class self-reliant, globally competitive, and future ready automotive manufacturing base.

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