With the Indian government’s ambitious Production Linked Incentive (PLI) scheme for automobiles now in full swing, the industry is at a pivotal inflection point. Over ₹1,350 crore has already been disbursed, catalyzing a domestic manufacturing push aimed at localizing advanced technologies and transforming India into an electric vehicle powerhouse. To decode the on-the-ground impact of this policy, we sat down with Kwame Zaire, a renowned manufacturing expert whose work focuses on production management and quality in the electronics and equipment sectors. In this conversation, we explore the operational strategies companies are using to scale up, the critical role of state policies in creating manufacturing ecosystems, the unique synergy between legacy automakers and EV startups, and the intricate journey of component makers leveraging these incentives to build a self-reliant Indian supply chain.
Given that ₹1,350 crore has been disbursed against eligible sales of nearly ₹33,000 crore, what are the key operational steps and metrics approved companies are using to scale up production and meet the ambitious ₹2,31,500 crore sales target by 2028?
That’s the core challenge, isn’t it? Moving from that initial ₹33,000 crore to over ₹230,000 crore is not a linear path; it requires an exponential leap in capability. The money disbursed is essentially fuel, but the engine is a complete operational overhaul. From what I’ve observed inside these facilities, the focus is twofold: intelligent automation and incredibly granular metric tracking. Companies are aggressively implementing predictive maintenance on their assembly lines because unplanned downtime is the single biggest enemy of scale. They can’t afford to have a critical machine go down for hours when they’re chasing these kinds of numbers. They are also designing more flexible, modular production lines that can quickly adapt to produce different Advanced Automotive Technology components. The most critical piece, however, is how they are measuring success. It’s no longer just about the number of units coming off the line. Their dashboards are now tracking domestic value-addition percentages in real-time and linking production output directly to PLI incentive claims. Every component is being scrutinized for localization potential, because that’s what strengthens the entire EV value chain and maximizes the benefits of the scheme.
With Maharashtra and Tamil Nadu hosting 134 of the 278 approved units, what specific state-level policies are making them so attractive for investment? Could you provide an anecdote on how this concentration is accelerating the development of hyper-local EV component supply chains in those regions?
It’s a classic case of an ecosystem effect, supercharged by proactive state policies. These states, particularly Maharashtra and Tamil Nadu, have a long history in automotive manufacturing, so they already possess a foundation of skilled labor and established logistics networks. What makes them so magnetic now are policies that go beyond simple tax breaks. They offer streamlined land acquisition, dedicated high-capacity power infrastructure which is critical for energy-intensive manufacturing, and they partner with industry to create tailored skilling programs. This creates a fertile ground for investment. I recently visited a new component manufacturing unit outside Pune, and the plant head shared a fantastic story. They produce battery enclosures, a bulky but vital AAT product. By setting up their plant within a designated auto hub, they were just five kilometers away from their primary OEM client. Their logistics went from a multi-day affair involving trucks navigating city traffic to a just-in-time process using a dedicated corridor. This proximity has enabled them to co-develop new designs with the OEM in real-time, drastically cutting down R&D cycles and building a truly symbiotic relationship. That is the power of a hyper-local supply chain in action; it’s not just about cost, it’s about speed and innovation.
The scheme lists both legacy automakers like Mahindra and new players like Ola Electric. How is this mix of companies influencing the development of Advanced Automotive Technologies, and which specific EV components are seeing the fastest localization progress because of these unique collaborations?
This intentional mix of legacy giants and agile startups is one of the most brilliant aspects of the PLI scheme’s design. It creates a dynamic tension that accelerates progress for the entire industry. The legacy players, like Mahindra or Tata Motors, bring decades of experience in manufacturing excellence, supply chain management, and the rigorous quality control required for automotive-grade products. They know how to build things reliably at a massive scale. On the other hand, the new entrants like Ola Electric bring a software-first mindset, an aggressive appetite for risk, and a fresh perspective on vehicle architecture and technology integration. The influence is bidirectional. The startups are learning the hard-won lessons of mass production and quality assurance from the veterans, while the established automakers are being pushed to innovate faster, especially in areas like battery management systems (BMS), vehicle control units (VCUs), and connected car technologies. Consequently, the components seeing the most rapid localization are precisely at this intersection of hardware and software. We’re seeing tremendous progress in domestically produced electric motors, power electronics, and sophisticated battery packs, as these require both cutting-edge technology and the robust manufacturing discipline that this unique blend of companies fosters.
The goal is to strengthen India’s EV value chain. Can you walk me through the step-by-step process of how a component champion, like UNO Minda, might use PLI incentives to move from importing a key part to establishing its full domestic production, including the challenges they face?
Absolutely. Let’s trace the journey for a “Component Champion” like UNO Minda with a complex AAT product, say, a digital instrument cluster for an electric two-wheeler. The process begins with a strategic decision based on the PLI framework. Phase one is often assembly, or what we call “shallow localization.” They might start by importing the core printed circuit boards (PCBs) and screens while manufacturing the plastic casings and wiring harnesses locally. The sales from these finished units qualify for incentives, which is crucial because it generates immediate cash flow. This PLI-backed capital is then funneled directly into phase two: deep localization. This is where the real investment happens. They would use the funds to set up their own surface-mount technology (SMT) lines to populate the PCBs in-house. This is a massive technological and capital leap. The biggest challenge here isn’t just buying the machines; it’s validating a whole new ecosystem of local suppliers for smaller passive components like resistors and capacitors that must meet stringent automotive standards. The final phase is achieving full self-reliance, where they are designing the hardware and writing the software for the clusters entirely in India. This journey, from assembly to design and full manufacturing, is fraught with challenges related to quality control and supplier development, but the PLI scheme effectively de-risks the heavy capital expenditure required, making it a viable and attractive path.
What is your forecast for India’s role in the global EV supply chain by the end of this PLI scheme in 2028?
My forecast is one of significant transformation. By 2028, I firmly believe India will have moved far beyond being just an assembly hub for EVs. We are on a clear trajectory to become a formidable design and manufacturing powerhouse for specific, high-value Advanced Automotive Technologies. The PLI scheme is not just building factories; it is cultivating a deep ecosystem of R&D, skilled engineering talent, and a robust tiered supply chain. We will not only achieve a high degree of self-reliance in critical components like electric powertrains, battery management systems, and advanced driver-assistance systems, but we will also become a credible exporter of these technologies. The true marker of success, for me, will be when we see “Made in India” AAT components being designed into vehicles for global markets in Europe and North America. That will signal that our value chain has achieved global competitiveness, and I am confident we are on the right path to make that a reality.
