Another industrial policy misstep

PLI for auto sector goes in the wrong direction

The Union Cabinet has decided on a major new production-linked incentive (PLI) scheme aimed at reviving and transforming the automotive sector in India. The planned outlay of government funds for the scheme is in excess of Rs 26,000 crore — not an insignificant sum, albeit considerably lower than the original plans as reported previously. There are two aspects to the scheme: One targeted at original equipment manufacturers and the other at the components ecosystem. They should be evaluated independently of each other for their potential, their design, and their effectiveness.

The OEM scheme focuses in particular on electric vehicles and