Maruti Suzuki, Hero Moto Corp, Tata Cummins receive incentives
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Maruti Suzuki, Hero Moto Corp, Tata Cummins receive incentives
  • Kevin Lee 기자
  • 승인 2022.05.10 16:20
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Press releases provided by the Embassy of India in Seoul

The following article is based on information provided by the Economic-Commercial Office of the Embassy of India in Seoul for publication by The Korea Post media, publisher of 3 English and 2 Korean-language news publications since 1985.-Ed.

A proposed investment of Rs 29,834 crore is expected from the 75 approved applicants under the Component Champion Incentive Scheme.

Maruti Suzuki, Hero MotoCorp, Lucas-TVS, Tata Cummins, and Toyota Kirloskar Auto Parts are among the 75 firms approved for receiving incentives under the Production Linked Incentive (PLI) scheme for the automobile and auto components sector, the government said on Tuesday.

The Embassy of India in Seoul
The Embassy of India in Seoul

A proposed investment of Rs 29,834 crore is expected from the 75 approved applicants under the Component Champion Incentive Scheme.

The Ministry of Heavy Industries had earlier selected 20 applicants under the Champion OEM Incentive Scheme. The two components are part of the PLI scheme.

The scheme offers an incentive of up to 18 per cent to encourage industry to make fresh investments in the indigenous supply chain of Advanced Automotive Technology (AAT) products.

"The PLI Scheme for Automobile and Auto Component Industry in India has been successful in attracting proposed investment of Rs 74,850 crore against the target estimate of investment Rs 42,500 crore over a period of five years. The proposed investment of Rs 45,016 crore is from approved applicants under Champion OEM Incentive Scheme and Rs 29,834 crore from approved applicants under Component Champion Incentive Scheme," an official statement said.

Among the 75 firms selected, two new non-automotive investors (component) companies approved include Bharat Heavy Electricals Limited (BHEL) and Ceat Limited.

Apart from Indian business groups, approved applicants include those from countries such as Japan, Germany, the US, UK, Republic of Korea, Ireland, France, Belgium, Netherlands, and Italy, the statement added.

Heavy Industries Minister Mahendra Nath Pandey said, "The overwhelming response shows that Industry has reposed its faith in India's stellar progress as a world-class manufacturing destination which resonates strongly with Prime Minister's clarion call of AtmaNirbharBharat - a self-reliant India."

"India will surely take a huge leap towards cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system," he added.

The PLI scheme for the auto sector was open to existing automotive companies as well as new investors who are currently not in automobile or auto component manufacturing business.

The Champion OEM Incentive scheme is a 'sales value linked' scheme, applicable on battery electric vehicles and hydrogen fuel cell vehicles of all segments.

The Component Champion Incentive scheme is a 'sales value linked' scheme, applicable on Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, vehicle aggregates of two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors, among others.

India makes 35 drug raw materials which were imported before:

Chemicals and Fertilisers Minister Mansukh Mandaviya says move will help India become self-reliant in manufacturing key drugs. Most raw materials were so far imported from China.

New Delhi: Minister for Chemicals and Fertilisers Dr Mansukh Mandaviya has said that of the 53 drug raw materials for which India was dependent on imports, 35 are now being manufactured in India.

“Under the production-linked incentive (PLI) scheme, 32 new plants for the production of APIs (Active Pharmaceutical Ingredients) have been set up and production has now started in 35 of the 53 identified APIs. Under the scheme, the government is providing viability gap funding to reduce dependence on imports,” Mandaviya told reporters in New Delhi.

About 66 per cent of India’s API imports come from China.

APIs, also known as bulk drugs, are the key raw material used for manufacturing medicines. For instance, paracetamol is the API for Crocin.

Indian drugmakers import around 70 per cent of their total bulk drugs from China. In the 2018-19 fiscal, the government had informed the Lok Sabha that the country’s firms imported bulk drugs and intermediates worth $2.4 billion from China.

APIs go into the making of essential drugs, such as antibiotics, anti-HIV medicines among others, and for these 53 APIs, 90 per cent of the amount consumed in India came from abroad.

Dependence on China

India’s dependence on China for the raw materials of its otherwise formidable pharmaceutical industry has been a matter of concern for many years. This has led to questions being asked about the bargaining power it gives Beijing against New Delhi.

These concerns gained urgency in the wake of the 2017 Doklam stand-off when bilateral relations hit a new low. The Covid lockdown in China in the first months of 2020, which stoked fears of a shortage in India, only made the clamour for API self-sufficiency louder, with the subsequent stand-off at Ladakh further complicating relations between the two neighbours.

A commerce ministry statement in 2021 said PLI schemes are a “cornerstone of the government’s push for achieving an Atmanirbhar Bharat (self-reliant India)”.

“The objective is to make domestic manufacturing globally competitive and to create global champions in manufacturing. The strategy behind the schemes is to offer companies incentives for incremental sales from products manufactured in India, over the base year. They have been specifically designed to boost domestic manufacturing in sunrise and strategic sectors, curb cheaper imports and reduce import bills, improve the cost competitiveness of domestically manufactured goods, and enhance domestic capacity and exports,” the statement read.

Rs 15,000 cr provided so far

Under the PLI scheme for APIs, a financial incentive will be given to eligible manufacturers 41 eligible products, which cover 53 APIs, for a period of six years. Ministry sources say approximately Rs 15,000 crore has been spent under the scheme since it was notified last year.

Ministry sources also said that there was nothing unusual about the recently announced 10 per cent rise in the cost of essential medicines.

“Essential medicine prices are linked to the wholesale price index (WPI). If the WPI goes down, they can go down too. This year the WPI went up by 10 per cent, hence the revision, even though the price of APIs went up,” said a source.

India’s EV transition continues:

Besides, due to the incentives offered, EV adoption in India is increasing rapidly, with both the government and private companies boosting the efforts to create the EV charging infrastructure.

As of 25 March, over 10.7 lakh EVs and 1,742 Public Charging Stations are operational in India.

The number of electric vehicles (EVs) on roads in India has reached over ten lakhs, with around 1,700 charging stations operational in public places across the country.

As per Vahan 4.0 data, as of 25 March, 10,76,420 EVs and a total of 1,742 Public Charging Stations (PCS), as per the Bureau of Energy Efficiency (BEE), are operational.

Besides, due to the incentives offered, EV adoption in India is increasing rapidly, with both the government and private companies boosting the efforts to create the EV charging infrastructure.

Under the Scheme for Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME India Phase II) of the Ministry of Heavy Industries (MHI), 2,877 public EV charging stations have been sanctioned in 68 cities.

Also, action plans have been prepared by the Bureau of Energy Efficiency (BEE) for eight cities with a four million-plus population, namely Mumbai, Delhi, Bangalore, Ahmedabad, Chennai, Kolkata, Surat, and Pune.

Under these action plans, scenario wise targets have been prepared for Business as Usual (BAU), Moderate and Aggressive Scenarios to install chargers in these cities.

Plans are afoot to install PCSs along the national highways and expressways. Energy Efficiency Services Limited (EESL), in consortium with Convergence Energy Services Ltd. (a subsidiary of EESL), has been awarded the work for setting up EV charging stations along 16 NH/Expressways.

For this, the National Highways Authority of India (NHAI) provides land near toll plazas and its buildings to install Electric Vehicle Charging Stations, based on a revenue-sharing model.

As part of the Wayside Amenities (WSAs), the NHAI has also awarded 39 such facilities for development.

Further, as per the Ministry of Power guidelines, there will be at least one charging station every 25 km on both sides of the highway and at least one charging station for long-range or heavy-duty EVs every 100 km on both sides of the road.

PLI scheme for textiles attracts 67 companies:

Textiles secretary UP Singh said the investments committed by the applicants have exceeded the government’s expectations of over Rs 19,000 crore.

As many as 67 companies have applied for support under the Rs 10,683-crore production-linked incentive (PLI) scheme for the textiles and garment sector, pledging investments of around Rs 23,000 crore, textiles secretary UP Singh said on Saturday.

Singh didn’t reveal the names of potential investors but sources told FE that the applicants include Reliance Industries, Arvind Group, Welspun, IndoRama Synthetics, Bombay Dyeing, Vardhman Group, Trident and Shahi Exports. “The who’s who of the textile and garment industry has expressed interest in the scheme. The list of beneficiaries will be out soon,” said one of the sources. The textile ministry’s initial target was to draw 60 firms, he added.

Singh said the investments committed by the applicants have exceeded the government’s expectations of over Rs 19,000 crore. The textile PLI scheme covers 40 man-made fibre (MMF) garments, 14 MMF fabric products and 10 technical textile items. “We have taken a number of steps to promote growth of the technical textile sector. There has been a very good response for the PLI scheme,” Singh said at a CII event.

The government had extended, for a second time, the deadline for applying for incentives under this scheme to give more time to companies to weigh their investment plans. Interested firms were allowed to submit their applications until February 28.

Under the scheme, incentives will be extended for five years. It will remain operational until 2029-30.

The scheme is open to two categories of investors. Those who will invest at least Rs 300 crore will be eligible for a 15% incentive in the first year if they achieve a turnover of Rs 600 crore or more.

Similarly, those investing at least Rs 100 crore will get 11% in the first year if their turnover hits Rs 200 crore or more. After the first year, both the categories of investors will have to show a 25% incremental turnover annually. But the benefits will drop by 100 basis points with each passing year in both the cases.

This PLI scheme has marked a paradigm shift in the government’s decision-making on two counts. First, it earmarks big bucks for big companies, shedding its long and costly bias towards small businesses. Second, it seeks to correct India’s historical policy preference for a cotton-dominated value chain, which is contrary to the global trend. The idea is to reclaim India’s export markets after ceding substantial ground to Bangladesh and Vietnam in recent years.

Even before the pandemic struck, India accounted for 4.3% (or $35.5 billion) of global exports of textiles and apparel in 2019 but its share in the man-made fibre segment was much lower at 2.8% ($9.3 billion). In fact, products based on man-made fibres made up for only 26% of India’s textiles and garments exports, compared with almost 50% in China and 49% in Vietnam.

India can grow consistently at 8% for next 20 years:

Indian economy can grow consistently at 8% for the next 20 years leading to the generation of up to 1.5 crore new jobs and bringing out 3.5 crore people out of the poverty every year on the basis of the capital investment strategy of the government, Union Minister Ashwini Vaishnaw said on Saturday.

Addressing the annual general meeting of Assocham, he said that the government had set a target of increasing the capital investment level in the budget from 27% of the GDP to 35% of the GDP over the next few years.

“We follow the strategy of capital investment for 5-6 years more, we can grow at 8% consistently for the next 20 years. 8 growth in the next 20 years means, every year close to 1-1.5 crore new employment, 30-35 million people coming out of poverty. That’s the change we can bring in our society by that thought process,” Mr. Vaishnaw said.

The Minister said that India had been a consumption-led economy in the past and the Prime Minister had taken a “path of faith” to increase capital investment despite reluctance from several economists.

“Many of the European countries followed the prescription of the noble laureates and they are in a very bad situation. We decided to choose the path which had three elements – public investment, very focussed consumption and reforms, and incentives for private industries,” Mr. Vaishnaw said.

He said Germany, the U.S., Japan, China and South Korea had followed the same path of capital investments for several years.

The Minister said the country’s nominal GDP at the end of the financial year 2021 was ₹198 trillion and the target was to reach ₹225 trillion.

“In this ₹198 trillion economy, close to ₹116 trillion came from consumption which is about 59% of the GDP and ₹53 trillion came from investment, which is only about 27% of the GDP,” the Minister said. The government, after analysing that its liability is about 60% of the GDP, decided to go for increasing capital investments.

Mr. Vaishnaw said that the Centre roughly got ₹20 trillion as gross tax revenue and net tax revenue, after taking out state government share, is about ₹15 trillion and non-tax is about ₹3 trillion.

About ₹18 trillion is the total receipt that the government of India gets on the revenue side,” he said.

The Minister said that the government, in last year‘s budget made a capital investment of ₹5.5 trillion.

He said that the GDP target surpassed the ₹225 trillion target and reached ₹232 trillion.

The Minister said that the result of ₹5.5 trillion was now visible and based on the result the government decided to increase the capital investment to ₹7.5 trillion.

“This will add ₹22.5 trillion to the Indian economy” Mr. Vaishnaw said.

He said that the way our economy is structured, ₹13 trillion will go to the MSME sector and close to ₹10 trillion will go as wages and salaries which lead to people spending in several sectors.

The Minister said that people who are in the brick and mortar industry may have seen that the factory capacity utilisation was around 60-70% a year ago, which has now reached about 80-85 (%) and in some sectors it has reached 90-95% where people are now planning setting up new facilities.


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