Tough to calculate local value-add, say auto PLI applicants to govt

Multiple companies that have qualified for the government’s ₹25,938-crore production-linked incentives (PLI) scheme for the automotive industry have approached the government stating that they are facing difficulties computing the domestic value addition (DVA) in their products beyond their immediate suppliers, said a senior government official.

However, the ministry of heavy industries, which is implementing the PLI scheme for the automotive industry, has asked the applicants to develop a robust methodology for calculating the DVA across their supply chain, Hanif Qureshi, joint secretary, ministry of heavy industries told ET.

Companies may enlist the assistance of IFCI if required for coming up with a methodology to compute DVA, he said. IFCI, a government-backed non-banking financial company, has been appointed the project management agency for the PLI scheme for automobile and auto component industry.

“The purpose of the PLI scheme is to boost domestic value addition,” said Qureshi. “So, companies will have to calculate their DVA.”

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