Reflecting on the milestones in Manufacturing 2024

By Staff Report December 20, 2024 3:33 pm IST

The Production Linked Incentive (PLI) scheme for the Automobile and Auto Components Industry, the FAME II scheme to promote electric mobility in India and the launch of the PM E-Drive scheme for promoting green mobility, all combined, fostered a fruitful year for the manufacturing sector.

The key initiatives/achievements/events of the Ministry of Heavy Industries (MHI) during the year 2024 gave a boost to the manufacturing sector. The Production Linked Incentive (PLI) Scheme for the Automobile and Auto Components Industry, was the most sought-after scheme with a budgetary outlay of ₹25,938 crore, to enhance India’s manufacturing capabilities for Advanced Automotive Technology (AAT) products, overcome cost disabilities, and build a robust supply chain. The scheme covers FY 2023-24 to FY 2027-28, with incentive disbursements from FY 2024-25 to FY 2028-29. The scheme offers incentives of 13%-18% for Electric Vehicle and Hydrogen Fuel Cell components and 8%-13% for other AAT components. As of September 2024, ₹20,715 crore investment and ₹10,472 crore incremental sales have been achieved, with the first incentive disbursement planned for FY 2024-25. Key features include a minimum 50% domestic value addition and eligibility for domestic and export sales.

The FAME-II Scheme, launched in 2019 with an outlay of ₹11,500 crore is to promote electric mobility in India through demand incentives for e-2Ws, e-3Ws, e-4Ws, e-buses, and EV public charging stations (PCS). As of October 31, 16.15 lakh EVs have been incentivised: 14.27 lakh e-2Ws, 1.59 lakh e-3Ws, 22,548 e-4Ws, and 5,131 e-buses. Additionally, 10,985 EV PCS have been sanctioned, with 8,812 allocated for installation. The scheme includes a phased manufacturing program and has supported significant policy initiatives, such as reducing GST on EVs and enabling state EV policies, contributing to India’s transition to sustainable mobility.

The PM E-DRIVE Scheme, with a total outlay of ₹10,900 crore, was implemented from October 1, 2024, to March 31, 2026, to promote green mobility and develop the EV manufacturing ecosystem. The allocation includes ₹3,679 crore for subsidies to incentivise 28 lakh e-2Ws, e-3Ws, e-ambulances, and e-trucks; ₹4,391 crore for the procurement of 14,028 e-buses by public transport agencies; ₹2,000 crores for installing 22,100 fast chargers for e-4Ws, 1,800 fast chargers for e-buses, and 48,400 fast chargers for e-2Ws/3Ws; ₹780 crores for upgrading testing agencies; ₹500 crores each for deploying e-ambulances and e-trucks; and ₹50 crore for administrative expenses.

The Scheme to Promote Manufacturing of Electric Passenger Cars (SMEC) in India, notified on March 15, 2024, aims to attract global investments, promote India as a manufacturing hub for electric vehicles (e-4Ws), and boost domestic value addition (DVA). Approved applicants need a minimum of ₹4,150 crore (USD 500 million) within three years, achieving 25% DVA during this period and 50% within five years. The scheme allows limited imports of e-4Ws at reduced customs duty, capped at 8,000 vehicles per year, with a total duty foregone per applicant limited to ₹6,484 crore or the committed investment. The scheme emphasises strict DVA compliance, advanced performance criteria for e-4Ws, and coordination through an inter-ministerial sanctioning committee, with testing by accredited agencies like ARAI, ICAT, and GARC.

Government approved Production-Linked Incentive (PLI) Scheme for setting up manufacturing facilities for Advance Chemistry Cell (ACC), Battery Storage in India, with an outlay of Rs. 18,100 crore for 7 years. The Scheme aims to enhance India’s manufacturing capabilities and envisages incentivising large domestic and international players to establish a competitive ACC battery set-up in India.

Other Initiatives-

1. Ministry of Heavy Industries organised a PLI-Auto Conclave under the chairmanship of Dr. Mahendra Nath Pandey, Minister of Heavy Industries on 16.01.2024 at Bharat Mandapam, New Delhi, highlighting the salient features of the PLI Scheme for Automobile and Auto Component Industry and undertaking stakeholder consultation. Shri Krishan Pal Gurjar, Minister of State for Heavy Industries and Power was also present during the PLI Auto Conclave. The vehicles approved under the scheme were also displayed during the event. In the conclave, the Minister urged the stakeholders to increase indigenisation in the Auto Industry paving the path for “Aatmanirbhar Bharat”.
2. BHEL has successfully developed an 85 KW Axial Flux Permanent Magnet (PM) based motor for e-mobility and defence applications. This technology offers a substantial reduction in size & weight and is ARAI-certified for e-bus. Its performance has also been demonstrated to the Indian Navy at Naval Dockyard, Vizag.
3. MHI launched the PM E-DRIVE Scheme at Bharat Mandapam, New Delhi, on 1st October 2024. Union Minister (HI & Steel) Shri H. D. Kumaraswamy, along with MoS (HI & Steel) Shri Bhupathi Raju Srinivassa Varma, presided over the event in the presence of senior officials and key leaders from the automotive industry.
4. The Second India-Japan Joint Working Group (JWG) Meeting on Automotive took place on 6 November 2024, in New Delhi, under the India-Japan Industrial Competitiveness Partnership (IJICP). It included a Japanese delegation, Indian industry associations, and government officials. Discussions centred on bilateral cooperation in hybrid vehicle incentives, automotive recycling, ADAS, cyber security, and capacity building. The meeting aimed to strengthen ties in the automotive sector.
5. A Statement of Intent (SOI) was signed between the Ministry of Defence (India) and the Ministry of Defence (UK) on 28th November 24 for cooperation on the design & development of an Electric Propulsion System (EPS) for Indian Naval ships.