Maruti Suzuki now eligible for production-linked incentive scheme
What's the story
Maruti Suzuki has been added to the list of companies eligible for incentives under India's ₹25,000 crore production-linked incentive (PLI) scheme for electric vehicles (EVs). The move is expected to boost EV adoption and support India's clean mobility push. The Ministry of Heavy Industries updated the beneficiary list on January 27, marking the first revision in four years with Maruti's inclusion.
Market impact
Maruti's inclusion marks a turning point
Maruti Suzuki's inclusion in the PLI scheme is significant as it holds a nearly 40% share of India's passenger vehicle market. This could help ramp up EV production, enhance utilization of the PLI outlay, and further the government's localization and clean fuel targets. Earlier, only its subsidiary Suzuki Motor Gujarat Private Ltd (SMGPL) was on the list but now Maruti has been directly inducted after amalgamating SMG into itself in December last year.
Future plans
EV journey and PLI scheme benefits
Maruti Suzuki started exporting its first EV, the eVitara, in August last year. However, domestic sales are yet to begin. The company had previously said that domestic sales would start in the January-March quarter of this fiscal year. If eligible under the scheme, an automaker can claim incentives between 8% and 18% of determined sales value which could be crucial for profitability.
Disbursal details
Anticipated increase in disbursals with Maruti's inclusion
In its first year (FY25), the government disbursed ₹322 crore out of an allocation of ₹604 crore for the PLI-Auto scheme. This was followed by around ₹2,000 crore out of an allocation of ₹2,800 crore in the second year. A senior government official said Maruti's entry could significantly increase disbursals and help achieve the target of utilizing the scheme's full outlay within the stipulated time.
Scheme overview
Union cabinet approved PLI-Auto scheme in 2021
The Union cabinet approved the PLI-Auto scheme in 2021 with incentives for automakers and component makers over five fiscal years through FY29. Initially, 115 companies applied for benefits under this scheme. However, only those meeting its 50% domestic value addition criteria are eligible to claim incentives. This move is widely regarded as a significant step in India's journey toward electric mobility and sustainability.