Auto PLI Scheme: Big news for Tata and MG Motor, this decision of the government will benefit the car companies in crores.

Auto PLI Scheme: After the India-China border dispute, the ice on trade relations between the two countries is slowly melting. Recently, Chinese President Xi Jinping had an important meeting with Prime Minister Narendra Modi during the BRICS Summit. The effect of this diplomatic softening is now being felt in the domestic manufacturing sector. According to media reports, the central government may soon consider PLI applications from automobile companies that involve Chinese investment. The government’s doors can now be opened for companies that have received FDI approval.

MG will benefit greatly from the Tata Group

This step of the government will make the way for many big companies easier. According to a report in the Economics Times, the two joint ventures of Tata Autocomp Systems could directly benefit from this. These include the ‘Techo Prestolite’ made in collaboration with Prestolite Electric Beijing, which designs special motors for electric vehicles. Apart from this, ‘Techo Air International’, which manufactures automotive air conditioning in collaboration with Air International Shanghai, is also expected to benefit from PLI. This is also a big relief news for ‘JSW MG Motor India’, which sells MG brand vehicles in association with JSW Group.

Only old PLI applications will be considered

The official has clarified that the government is not opening any new window for fresh applications under the PLI scheme. Applications of only old companies which have received FDI approval will be taken forward. Many PLI applications were stalled due to delays in Chinese investment proposals. Now after the new guidelines these approvals have increased. Recently, one such joint venture of Dixon Technologies, which manufactures electronic components, has been approved to provide PLI benefits.

The FDI rules were modified after a heated controversy

After the violent clashes in the Galwan Valley in 2020, India imposed several strict economic restrictions on China. More than 200 Chinese mobile apps were banned at the time. Also, prior government approval was made mandatory for any foreign direct investment (FDI) coming from countries along India’s land border. Now the diplomatic negotiations between the two countries have intensified. It has also agreed to resume direct flights, which is now providing relief on the investment front.

The figure of investment in the auto sector is over 45 thousand crores

The government approved the Auto PLI scheme in September 2021. Its total budget was kept at Rs 25,938 crore. So far, more than 45,000 crores of rupees have been invested under this scheme. It is expected that the government will spend around Rs. 4,000 crore will be paid. This incentive will be available to those companies that meet additional sales along with other prescribed standards. In the budget of the financial year 2026-27 for this scheme Rs. 5,939.87 crore has been kept, which is Rs. 2,091.26 crore is almost three times higher than Rs.