The government will give around Rs. 26,000 crore ($ 3.5 billion) in incentives to automakers and drone makers over a five-year period. The program aims to increase the production of electric and hydrogen vehicles.
Government Says LIP Designed to Help India Become a Global Player in the Automotive Sector
The Indian cabinet on Wednesday approved an auto industry incentive program to boost production of electric and hydrogen vehicles and promote the manufacture of drones. The government will provide around ₹ 26,000 crore ($ 3.5 billion) in incentives to automakers and drone makers over five years, Minister of Information and Broadcasting Anurag Thakur told reporters. . “The incentive program was designed to help India become a global player in the automotive sector,” Thakur said, adding that it would also boost local manufacturing.
The proposal comes at a time when annual car sales in India have fallen to their lowest level in a decade due to the pandemic that followed an economic downturn in 2019. Electric vehicle (EV) sales only account for that. a fraction of the total. Several years ago, India was set to become the world’s third largest automobile market by 2020, after China and the United States, with sales of 5 million per year. Instead, car sales have stagnated at around 3 million a year even before the pandemic.
Also Read: Electric Two-Wheeler Manufacturers Welcome PLI Program for Automotive Sector
Ford Motor Co last week joined General Motors and Harley Davidson in pulling out of India, where it racked up losses of $ 2 billion. The US automaker has said it will stop making cars in India, taking an additional $ 2 billion.
The government said in a statement that the incentive program is expected to help attract new investment of around 42,500 crore in the automotive sector. The incentives will range from 8% to 18% of the sales value of vehicles or components, and will be granted to companies if they meet certain conditions such as a minimum investment over five years and 10% growth in sales each year. Automakers, for example, are expected to invest 2,000 crore over the period, while auto parts companies are expected to invest ₹ 2,500 crore, the government said.
The original plan was to spend around 57,000 crore or $ 8 billion to induce automakers and auto parts makers to build primarily gasoline-powered vehicles and their components for sale and export in the domestic market, with additional benefits for electric vehicles. However, the focus of the program has been redesigned to incentivize clean fuel vehicles as Tesla Inc prepares to enter India. Auto parts manufacturers will be incentivized to produce components for clean cars as well as to invest in advanced technologies such as sensors and radars used in connected cars, automatic transmission, cruise control and other devices electronic.
Sunjay Kapur, president of the Indian Association of Automotive Component Manufacturers (ACMA), said that with global economies reducing the risks of their supply chains, the program will help develop the country into “an attractive alternative source. of high-end automotive components “. India sees clean automotive technology as a central part of its strategy to reduce dependence on oil and debilitating air pollution in its major cities, while meeting its emissions commitment under the Accord. Bets on the climate.
National automaker Tata Motors is India’s biggest seller of electric cars, with rival Mahindra & Mahindra and motorcycle maker TVS Motor consolidating their electric vehicle plans. India’s largest automaker, Maruti Suzuki, has no short-term plans to launch electric vehicles, however. Girish Wagh, executive director of Tata Motors, said in a statement that the program would accelerate “the country’s progress towards green mobility” and help attract foreign investment.
(This story was not edited by The US Express News on Social Platforms.)
For the latest automotive news and reviews, follow TUSEN.com on Twitter, Facebook and subscribe to our YouTube channel.