India may clear existing PLI applications involving approved Chinese FDI, potentially easing investment bottlenecks for electronic components, EV drivetrains and other auto-electronics ventures.
India may consider existing Production-Linked Incentive (PLI) applications from automobile and auto-component companies with Chinese investments, provided the relevant foreign investments have received FDI approval. The move could ease delays affecting electronics and auto-electronics ventures linked to Chinese partners.
A senior government official, cited by The Economic Times, said, “existing PLI applications with foreign direct investment (FDI) approvals will be considered.” No fresh application window is being opened under the auto PLI scheme.
The development is particularly relevant to electronics because a Dixon Technologies venture with a Chinese partner for electronic components has already received approval for PLI benefits. Pending Chinese FDI approvals had earlier delayed the processing of some PLI applications.
The move could also benefit TACO Prestolite, Tata AutoComp Systems’ partnership with Prestolite Electric Beijing, which designs and manufactures advanced electric drivetrains and traction motors for EVs. Another Tata AutoComp venture, TACO Air International, with Air International Shanghai Co, manufactures automotive air-conditioning systems. JSW MG Motor India, a joint venture between JSW Group and China’s SAIC Motor, could also benefit.
The auto PLI scheme was approved in September 2021 with a ₹25,938-crore budgetary outlay. Incentives are linked to incremental production, investment and domestic value addition, among other criteria.
The reported consideration follows improved India-China engagement. India has introduced guidelines to expedite Chinese FDI approvals, while both countries have increased official-level exchanges and agreed to resume direct flights.
