India may clear PLI applications with China investment

In a move signaling the acceptance of Chinese investment in the automobile sector, India may consider applications from India-based companies with Chinese partners for production-linked incentives (PLI), officials revealed. This could pave the way for PLI benefits for Tata AutoComp Systems ventures with Chinese firms and JSW MG Motor India.

Existing PLI applications with FDI approvals will be considered, while fresh applications will not be accepted at this time. Tata AutoComp Systems, a joint venture between JSW Group and SAIC Motor, designs electric drivetrains and traction motors, while its JSW MG Motor India subsidiary manufactures MG-branded vehicles. India and China have recently seen a thaw in relations, with President Xi Jinping visiting India in June.

The government aims to expedite approvals for FDI proposals involving Chinese investments and recently introduced new guidelines to streamline the process. Pending approvals for Chinese FDI proposals previously delayed the processing of PLI applications. India's auto PLI scheme, launched in September 2021, has exceeded Rs 45,000 crore in investments and is expected to disburse around Rs 4,000 crore this fiscal year.