Auto cos seek PLI relaxations amid rare earths supply disruption
The Indian auto industry is seeking government relaxation on domestic value addition (DVA) norms for production-linked incentive (PLI) scheme and phased manufacturing programme (PMP) in the PM e-drive programme due to supply chain disruptions caused by curbs on rare earth magnet shipments from
China
, ToI reported.
The companies are also requesting approval to import complete component assemblies from China in the short term to avoid production schedule disturbances, sources told ToI. Top manufacturers including
Maruti Suzuki
,
Tata Motors
, Hyundai, Mahindra & Mahindra, Bajaj Auto, Hero Moto and TVS have petitioned the government. The industry is currently relying on existing inventory.
Supply chains have been crippled due to restrictions on rare earth magnet shipments by China. This has prompted the auto industry to seek government intervention.
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The auto industry wants relaxation in meeting domestic value addition (DVA) norms. These norms are related to the production-linked incentive (PLI) scheme and phased manufacturing programme (PMP) in the PM e-drive programme.
Sources indicate that companies have also requested permission to import complete assemblies of components from China. This is intended as a short-term solution.
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The aim is to ensure that production schedules are not disrupted. The companies include major manufacturers such as Maruti Suzuki, Tata Motors, Hyundai, Mahindra & Mahindra, Bajaj Auto, Hero Moto and TVS.
The industry is currently facing supply challenges from China. They are relying on existing inventory to manage production.
'DVA requirement in PLI and PMP in PM e-Drive schemes may have to be relaxed to allow for imports of completed assemblies,' the industry said in a representation to the government, according to sources.
The industry's representation highlights the potential need for relaxed import regulations. This is due to the ongoing supply chain challenges.
'In the eventuality of the challenge not being resolved, the industry will be constrained to import complete assemblies of components from China in the short term,' the companies said.
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