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Auto PLI will spur innovations, create global champions, says Baba Kalyani

auto | Mar 15, 2022 6:58 PM IST

Auto PLI will spur innovations, create global champions, says Baba Kalyani

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The government has granted approval to 75 companies for incentives under the Production-Linked Incentive Scheme (PLI) for the automobile and component industry.

The government has granted approval to 75 companies for incentives under the Production-Linked Incentive Scheme (PLI) for the automobile and component industry. Those who got approvals include the likes of Maruti Suzuki, Bharat Forge, Hero MotoCorp, and Bosch India, among others. The companies are expected to invest close to Rs 30,000 crore under the 'Component Champion Incentive Scheme'.

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The PLI scheme for automobile and auto component industry will be commencing from the next fiscal with an initial outlay of Rs 26,000 crore. While the PLI scheme would no doubt come as a boost for auto component manufacturers, there are headwinds. The prolonged conflict in Ukraine and sanctions against Russia could lead to further shortage of semiconductors.
“The whole concept behind the PLI game is to have local manufacturing area and it is not meant for people who are assembling products. It is meant for people who manufacture products,” Baba Kalyani, CMD of Bharat Forge, told CNBC-TV18.
“More than that, for people like us, who have always tried to make things with our own technologies, it provides a very good platform to create IPs in this new age technology of electric mobility or the new mobility technologies that are going to come into play in the next 15-20 years. So, I think it is a great platform, a great scheme, and it will encourage many, many new players in this sector to come in and develop technologies, which are world class. Hopefully, some of us will become global champions in this automotive component sector supplying to the rest of the world,” Kalyani said.
He added that if the automotive sector grows 20x in the next 25 years, it is going to be the biggest or biggest manufacturing sector in our country, and create the highest employment.
Sunjay Kapur, president of Automotive Component Manufacturers Association (ACMA), said what the PLI schemes brings to the industry as a whole is the encouragement to invest in future technologies.
“We are confident that the government has sufficient funds. We are looking forward to what comes next. There's an investment criterion of Rs 250 crore per company. Given the fact that we have 75 companies, we are looking at Rs 20,000 crore in terms of investments. This means a lot of new investments, and new technology coming into the country. It means job creation. So, it's all headed in the right direction,” Kapur said.
Deepak Jain, Chairman and Managing Director at Lumax Industries, said Lumax has about five other joint ventures, which through the holding company will get an opportunity to participate in the PLI scheme.
“Obviously, what it helps us to do is actually put in a lot more investments with our partners, it kind of focuses again, on India as manufacturing hub for us. We have got almost about eight components in the advanced list and we are excited to actually put in the investments to actually localise it,” Jain said.
He said PLI clearly gives the company the intent of not just Make in India, but also indulge in deep localisation and advanced technologies.
For the full interview, watch the accompanying video.
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