The Union Budget 2026 has doubled the allocation for the manufacturing-linked incentive (PLI) scheme for Auto and Auto Parts to Rs 5,940 crore for 2026-27 from Rs 2,818.85 crore funds estimate in FY26. The revised estimate for FY26 stands at Rs 2,091 crore.
The Rs 25,938 crore PLI Auto scheme was envisaged to increase home manufacturing of superior automotive know-how merchandise with a give attention to battery electrical automobiles and hydrogen gasoline cell automobiles.
Whereas PLI Auto scheme has seen a bounce in budgetary allocation, one other PLI scheme for battery cells has seen a steep cut in outlay.
The federal government’s Rs 18,100-crore PLI scheme for Superior Chemistry Cells (ACC) to promote battery cell localisation has seen a 44.5 % cut in allocation from Rs 155.76 crore in FY26 to Rs 86 crore in FY27. The revised estimate for FY26 was Rs 13.31 crore as just one battery cell maker, Ola Electrical, has commenced business operations.
As of October 2025, solely 2.8% (1.4GWh) of the focused 50GWh capability has been commissioned inside the stipulated timeline, fully by Ola Electrical. Of the 40GWh allotted up to now beneath ACC PLI, Reliance New Vitality is the one beneficiary that has indicated commissioning its second-spherical award capability (10GWh) on time, exhibits a report by JMK Analysis and Institute for Vitality Economics and Monetary Evaluation (IEEFA).
The full capability awarded beneath the scheme stands at 40 GWh, distributed amongst 4 beneficiary corporations, out of the 50 GWh on supply. Within the first bidding spherical held in March 2022, three corporations—Reliance New Vitality, Ola Electrical Mobility and Rajesh Exports—had been collectively awarded 30 GWh. Ola Electrical acquired the biggest share in that spherical, securing 20 GWh. Ola Electrical plans to fee 5GWh of its 20GWh by March 2026. “Nonetheless, Ola’s choice to restrict its capability to 5GWh till FY2029 dilutes the commitments the scheme envisions,” the report says.
Beneficiaries have confronted important provide chain and implementation bottlenecks, such because the stringent home worth addition (DVA) necessities, an aggressive two-12 months set up timeline, and visa approval delays for Chinese language technical specialists wanted for tools set up, main to delays in commissioning capability, the report notes.
For the PM Electrical Drive Revolution in Revolutionary Car Enhancement (PM E-DRIVE) Scheme, the Union Budget 2026 has earmarked Rs 1,500 crore for FY27, down 62.5 % from Rs 4,000 crore budgeted in FY26. To be clear, the revised estimate for the PM E-DRIVE scheme in FY26 stood at Rs 1,300 crore.
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