Automakers will be able to avail the benefits by submitting sourcing and pricing details of all the parts used in the vehicles from their tier-1 or direct suppliers, instead of providing information up to tier-3 suppliers or subcontractors as the government planned initially, people aware of the matter said.
This move comes at a time when the automobile and component manufacturers were finding it difficult to gather more detailed documentation to establish localisation, which is a key element required for getting support under the PLI programme. The proposed change has been enshrined in the standard operating procedures (SOPs) that will dictate the implementation of this scheme, officials in the know said.
The SOPs are presently in draft stage but have been firmed up by the ministry of heavy industries (MHI) after consultation with the automobiles and auto components industry representatives.
“The tier-1 suppliers need to ensure that they are locally sourcing their parts,” a senior government official told ET. “This will be covered in the commitments sought from the automobiles and auto components makers that are the targeted beneficiaries of the PLI scheme.”
The idea behind seeking data up to tier-3 suppliers was to ensure there is adequate value generation in the local market and taxpayer funds are not being used to subsidise imported parts. However, automakers said they could not get such data and their suppliers would also not share this information given its commercially sensitive nature.
