NEW DELHI, Sept 15 (Reuters) - India's cabinet on Wednesday
approved an incentive scheme for the automobile sector, aimed at
boosting production of electric and hydrogen fuel-powered
vehicles, and to promote the manufacture of drones.
The government will give about 260 billion rupees ($3.54
billion) in incentives to auto companies and drone manufacturers
over a five-year period, Anurag Thakur, minister of information
and broadcasting, told reporters.
"The incentive scheme has been designed to help India become
a global player in the automobile sector," Thakur said, adding
that it will also boost the country's efforts to increase local
The production-linked incentive scheme is expected to help
attract new investment of about 425 billion rupees in the auto
sector and 50 billion rupees in the drones sector over the five
year period, the government said in a statement.
Auto parts makers will get incentives to produce components
for clean cars as well as for investing in safety-related parts
and other advanced technologies like sensors and radars used in
connected cars, automatic transmission, cruise control and other
The original plan https://reut.rs/31pIXP9 was to spend $8
billion to incentivise auto and auto part makers to build mainly
gasoline vehicles and their components for domestic sale and
export, with some added benefit for electric vehicles (EVs).
The scheme's focus was redrawn as Tesla Inc gears
up to enter India.
It also comes as India sees clean auto technology as central
to its strategy to reduce oil dependence and cut debilitating
air pollution in its major cities, while also meeting its
emissions commitment under the Paris Climate Accord.
Domestic automaker Tata Motors is the largest
seller of electric cars in India, with rival Mahindra & Mahindra
and motor-bike maker TVS Motor firming up
their EV plans.
India's biggest carmaker Maruti Suzuki, however,
has no near-term plan to launch EVs.
($1 = 73.5150 Indian rupees)
(Reporting by Aftab Ahmed and Aditi Shah; editing by Carmel