JSW MG Motor India has reason to believe that it could soon qualify for incentives under the government’s Auto PLI scheme. The government will consider existing PLI applications that involve Chinese investments, and JSW MG is one of the companies named. Authorities will take up pending applications by automobile and auto component makers with Chinese partners, having got the FDI clearances, officials said.
JSW MG Motor India, the joint venture between JSW Group and China’s SAIC Motor which sells MG-branded passenger vehicles in India, can benefit if its PLI application is taken up. The company has been focussing on deepening localisation while adding capacities at its Halol plant in Gujarat, but had to contend with restrictions on investments from neighbours, under Press Note 3. With FDI approvals expected to facilitate consideration of its PLI bid, the automaker can get PLI benefits in terms of incremental sales, investment commitments and localisation targets, to boost production of its vehicles.
The Auto PLI scheme, approved in 2021 with a budgetary outlay of around ₹25,938 crore, promotes the local manufacturing of advanced automotive technology vehicles and their components. Under it, incentives are given to companies which achieve targets on sales, capital expenditure and localisation. Investments under the scheme have crossed ₹45,000 crore, and the government expects to release around ₹4,000 crore this fiscal for companies which meet incremental sales targets. Only existing applications with FDI approvals would be taken up, officials said, adding that a new window for applications would not be opened.
JSW MG is among the car makers looking to benefit from the government’s relaxed stand on Chinese investments. In addition to JSW MG, two ventures of Tata AutoComp Systems with Chinese partners, one making electric drivetrains and traction motors and the other automotive air-conditioning systems, are also expected to benefit from the change. Delays in the clearances, primarily Chinese FDI approvals, had stalled their applications but some, including one with Dixon Technologies for electronic components, have moved to PLI approval.
JSW MG is working to ramp up localisation to meet targets for eligibility for incentives on electric vehicles, while expanding production. The company has been investing several thousand crore rupees in capacity addition, vendor development and new model launches as it builds up its credentials in India’s burgeoning new-energy vehicle space. Access to PLI benefits would help ease some of its cost pressures and promote deeper localisation. The move reflects a pragmatic approach to balancing strategic concerns on cross-border investments with the need to promote manufacturing and technology absorption in the auto sector. With FDI clearances getting processed, JSW MG Motor India and similar companies can look forward to a smoother route to the PLI benefits that encourage higher local value addition and production scale.