- Why in news
- On 13 January 2026, the Ministry of Heavy Industries released its Year End Review 2025. It reports progress on the PLI scheme for automobiles and auto components, PM E-DRIVE and related EV schemes.
- What it is
- The PLI Scheme for Automobile and Auto Components was approved in September 2021 with an outlay of Rs 25,938 crore. It rewards sales of Advanced Automotive Technology products made in India. Its aim is to cut cost disadvantages and build a supply chain.
- Incentive rates
- Incentive is 13%-18% for EV and hydrogen fuel cell components, and 8%-13% for other AAT components.
- Domestic value addition
- Only products with at least 50% Domestic Value Addition (DVA) get incentives.
- Scheme period
- Performance years run from FY 2023-24 to FY 2027-28, with disbursement from FY 2024-25 to FY 2028-29.
- Ministry
- The scheme is run by the Ministry of Heavy Industries.
Don’t confuse with PLI-Auto vs PLI-ACC: PLI-Auto (Rs 25,938 crore) supports auto and components. PLI-ACC (Rs 18,100 crore) supports 50 GWh of battery cell capacity.
Don’t confuse with PM E-DRIVE vs SMEC: PM E-DRIVE gives demand subsidies and charging support. SMEC allows limited e-car imports at lower duty in return for investment.
Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.
Why it matters
- Builds domestic manufacturing of advanced automotive and EV components and cuts import dependence.
- Supports Make in India, jobs and clean mobility.
Problems
- Realised sales and investment lag the targets, and the scheme depends on meeting the 50% DVA norm.
- EV supply chains still rely on imported battery cells and critical minerals.
Way forward
- Strengthen local battery and component supply chains and speed up DVA certification.
- Pair supply-side incentives with charging infrastructure and demand support.
Put in your answer
Approved applicants: 82 applicants were approved, with estimated investment of Rs 42,500 crore.
- 2025Mains GS3 · Q12Rationale, achievements, and improvements of the PLI scheme
- 2025Mains GS3 · Q16Challenges in semiconductor manufacturing and India Semiconductor Mission features
- 2023Prelims Q53Whether carbon fibres used in automobile and aircraft components can be recycled
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Schemes make up 52 of 327 news-linked Prelims questions, and this has facts like outlay and incentive rates. A year-end review gives no new decision, so no practice question.
Worth revising until Prelims 2027: most news questions come within two years of the event.