Bajaj Auto tops auto PLI payouts in FY26, ahead of Tata Motors, Ola

Bajaj Auto received the highest incentive payout under the production-linked incentive (PLI) scheme for automobiles and auto components in 2025-26 (FY26), at ₹625.65 crore, followed by Tata Motors and Ola Electric Technologies, according to a NITI Aayog-IIM Ahmedabad assessment released in November.

The report showed that incentive payouts to automakers rose sharply during FY26, even as job creation under the ₹25,938 crore scheme remained well below projections despite investments exceeding the five-year target.

Tata Motors received ₹403.18 crore in FY26, followed by Ola Electric at ₹366.78 crore, TVS Motor at ₹320.51 crore and Mahindra & Mahindra (M&M) at ₹283.82 crore.

Together, the five automakers received nearly ₹2,000 crore.

By comparison, total scheme disbursements were around ₹322 crore in FY25.

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Bajaj Auto and TVS Motor had received no incentives in FY25. Tata Motors received ₹142.13 crore that year, M&M ₹104.08 crore and Ola Electric ₹73.74 crore.

Toyota Kirloskar Auto Parts, the only component manufacturer listed in the company-wise disbursement table, received ₹2.05 crore in FY25.

While payouts gathered pace, the report flagged a gap between investments and employment generation under the scheme.

By March 2026, investments had reached ₹44,326 crore, exceeding the five-year projection of ₹42,500 crore by around 4 per cent.

However, the scheme had generated only 67,820 jobs against the projected 148,147, or about 46 per cent of the target.

An automobile industry analyst attributed the gap partly to the capital-intensive nature of advanced automotive manufacturing, particularly electric vehicles and components.

“Investments in new production lines, automation and technology development do not necessarily translate into a proportionate increase in jobs, especially during the initial stages of capacity creation,” he said.

The analyst added that the key test would be whether these investments eventually lead to higher domestic component sourcing, greater production and more employment across the supplier ecosystem.

The report itself noted that the scheme had not yet demonstrated employment growth beyond the industry’s natural trend, though this could change as manufacturing operations scale up.

Incremental sales have also lagged the investment trajectory.

Against the five-year projection of ₹2.31 trillion, cumulative incremental sales stood at ₹52,414 crore by March 2026, or around 23 per cent of the target.

The auto PLI scheme incentivises domestic manufacturing of advanced automotive technologies.

Despite the slower progress on sales and employment, the scheme has seen a sharp increase in electric vehicle production covered by incentives.

Incentivised EV volumes rose from 76,838 units in FY24 to nearly 12.85 lakh units in FY25, led by electric two-wheelers.

The number of electric two-wheelers covered under the scheme increased from 41,758 to more than 10 lakh.

Electric three-wheelers rose from 23,486 to nearly 2.15 lakh, while electric four-wheelers increased from 11,314 to 68,226 units.

The scheme provides incentives under two categories — Champion OEM, covering eligible advanced-technology vehicles, and Component Champion, covering advanced automotive components.

Manufacturers continue to face difficulties meeting the mandatory 50 per cent domestic value-addition requirement.

The report said the stringent localisation norms were proving difficult to comply with because India’s domestic supply chain for EV components and advanced automotive technologies was still developing.

High investment and turnover thresholds also tended to favour larger manufacturers, it noted.

So far, eight applicants under the Champion OEM category have received domestic value-addition certification covering 94 variants, while 10 Component Champion applicants have secured certification for 37 variants.

The assessment also found insufficient data to determine how much of the industry’s growth could be attributed directly to PLI incentives.

The scheme’s impact on exports could not be adequately assessed for the same reason.

Cumulative incentive disbursement under the auto PLI scheme stood at ₹2,386.36 crore as of March 2026, equivalent to around 9.2 per cent of its total outlay.