PLI scheme distorts 2-wheeler market, sidelines innovation-led firms
A report indicates that the Production Linked Incentive (PLI) scheme for two-wheelers has negatively impacted innovation-led firms in the auto market. While the scheme aims to boost domestic manufacturing, it has led to a decline in sales growth for non-PLI entities and sidelined startups focused on electric vehicles. Critics argue that the current criteria favor established automakers and do not support the growth of innovative companies in the sector.
- ▪The sales growth rate for non-PLI entities dropped significantly from 407% in FY22 to -33% in FY24.
- ▪Much of the innovation and patent activity in the two-wheeler market is occurring outside the PLI framework.
- ▪The government has no plans to create a separate PLI scheme for startups in the automotive sector despite industry demands.
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| Original publisher | The Hindu |
| Canonical URL | https://www.thehindu.com/news/national/pli-scheme-distorts-2-wheeler-market-sidelines-innovation-led-firms/article70917486.ece |
| Publication time | Tue, 28 Apr 2026 21:35:43 +0530 |
| Retrieval time | 2026-04-28T16:37:43.353Z |
| Last seen | 2026-04-28T16:37:43.353Z |
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Opening excerpt (first ~120 words) tap to expand
A new report says the Production Linked Incentive (PLI) scheme for two-wheelers has distorted the auto market by driving growth while sidelining innovation-led manufacturers, even as the Centre argues that many such startups lack the capital and market access to scale.Non-PLI entities’ sales growth rate declined from 407% in FY22 to -33% in FY24 and -11% in FY25. This shift coincided with a reordering of market leadership, at the expense of the industry’s innovation engine, says the Centre for Digital Economy Policy Research in its report titled “Impact assessment of auto PLI on two-wheeler EV industry”. On innovation, the report highlights that much of the patent activity and new product development has come from companies outside the PLI framework.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Hindu.
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