NEW DELHI: The ministry of heavy industries has disbursed about ₹2,000 crore to automakers and spare part manufacturers in FY26 under the production-linked incentive (PLI) scheme, and will complete pending disbursals worth about ₹40-50 crore by February.
“By today, we have given ₹2,000 crore as incentives. This is a very successful year for PLI-auto scheme,” said additional secretary at the ministry, at a press briefing in New Delhi.
Launched in 2021, the scheme has an outlay of ₹25,938 crore over five years. In its first year, four companies—Tata Motors, Mahindra & Mahindra, Ola Electric and Toyota Kirloskar Auto Parts—received a cumulative ₹322 crore.
In FY26, nine companies—five vehicle manufacturers and four component makers—received incentives. The beneficiaries were Tata Motors,Mahindra & Mahindra, Bajaj Auto, TVS Motor Co and Ola Electric, along with Delhi-TVS Technologies, Sona BLW Precision Forgings (Sona Comstar), Bosch Automotive Electronics and Tata Autocomp Systems, Qureshi said.
Beyond disbursals, investments under the scheme have also been successful, he said. “The target was to generate investments of about ₹42,500 crore, out of which investments worth ₹35,657 crore have already been made in the second year of the scheme,” he said.
Qureshi noted that most investments were made in the initial years and are expected to taper off, while sales of zero-emission vehicles produced using these investments are likely to accelerate in the coming years.
Of the 82 companies shortlisted under the scheme, 18 have met the investment and localisation criteria so far, he said.
The government will invoke bank guarantees of 10 component makers that have not made any investments to date, the senior official said.
Mint had earlier reported that the disbursal under the PLI-auto scheme for FY26 would be about ₹2,000 crore, and the budget allocation for the next fiscal year may be about ₹5,500 crore.
Tata Motors, Mahindra & Mahindra and Ola Electric, major beneficiaries last year, did not immediately comment on the development.
Industry experts said that total disbursal in the first two years is broadly about 10% of the scheme’s total outlay, indicating that there needs to be further rise in sales of electric vehicles.
“This momentum needs to be maintained to achieve complete disbursement of the allocated budget,” said Sharif Qamar, associate director of transport and urban governance at The Energy and Resources Institute (Teri).
“We have, so far, achieved 10 per cent of the total allocation, and three more years are remaining. It will be very challenging, particularly when a careful approach to technology support is required. The government should focus on clean tech as well as active technology to augment safety features of the vehicles,” Qamar said.
Qureshi said higher localisation and domestic value addition driven by the scheme have benefited thousands of micro and small suppliers in the auto industry.
Under the PLI-auto scheme, products must meet a minimum domestic value addition of 50% to be eligible for incentives. So far, eight vehicle manufacturers and 10 component makers have become eligible to claim incentives for 131 products, according to the ministry’s press note.
