Union Budget 2026 Allocates ₹5,939.87 Crore for Auto PLI Scheme

The Union Budget for 2026–27 has reinforced policy support for India’s automotive manufacturing ecosystem by sharply increasing allocations for the Production Linked Incentive scheme targeting vehicles and auto components. 

Budget Allocation and Year Wise Comparison 

For FY 2026–27, the government has allocated ₹5,939.87 crore to the PLI scheme for automobiles and auto components.  

This compares with a revised expenditure estimate of ₹2,091.26 crore for FY 2025–26 and an allocation of ₹2,818.85 crore in FY 2024–25. The higher outlay signals a stepped-up fiscal commitment towards incentivising domestic production in the automotive sector. 

Scheme Objectives and Payout History 

The PLI scheme for automobiles and auto components is designed to promote domestic manufacturing, attract fresh investment and strengthen India’s position in advanced automotive technologies.  

Announced in 2021 as part of the broader PLI framework, the scheme offers financial incentives linked to incremental sales of products manufactured in India.  

The first round of payouts under the scheme was made in January 2025, with Mahindra & Mahindra and Tata Motors receiving incentives of nearly ₹246 crore for FY24. 

Technology Focus and Validity Period 

The auto PLI scheme prioritises the production of advanced automotive technology vehicles and components, including electric vehicles and their parts.  

Eligible manufacturers receive incentives based on production performance over a defined period. The scheme remains applicable until FY29 and is intended to support long-term capacity creation and technology-led growth in the automotive and auto components segments. 

Read More: Defence Received Record Budget of ₹7.85 Lakh Crore: Up 15% Over Previous Budget! 

Conclusion 

With a significantly higher allocation of ₹5,939.87 crore in FY 2026–27, the PLI scheme for automobiles and auto components continues to play a central role in driving manufacturing expansion and technology adoption across India’s automotive sector. 

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