Automotive body trims export PLI red tape after industry pushback

The testing agency has eased domestic value addition certification norms for export models after automakers argued that additional paperwork increased compliance burdens

After facing opposition from automobile (auto) makers over additional paperwork under the auto production-linked incentive (PLI) scheme, the Automotive Research Association of India (ARAI) on Monday relaxed certification requirements for vehicles meant for export under the scheme, Business Standard has learnt.

 

In a notice issued on Monday afternoon, the ARAI said: “In cases where the Bill of Materials (BoM) and description of an export variant are identical to those of the corresponding domestic variant, the domestic value addition (DVA) certificate issued for the domestic variant would hold good for the export variant.”

 

A BoM is a detailed list of all parts, components, and raw materials used to manufacture a vehicle.

 

DVA refers to the proportion of a vehicle’s value generated within India through local manufacturing, sourcing of components, and other domestic inputs. Under the auto PLI scheme, manufacturers must meet specified DVA levels to qualify for financial incentives.

 

On December 22, 2025, ARAI — the government-run testing agency that verifies localisation levels of vehicle models claiming incentives under the auto PLI scheme — issued a notice requiring manufacturers to obtain separate DVA certificates for each export model.

 

Business Standard reported on Monday morning that automakers, during a meeting with officials of the Ministry of Heavy Industries (MHI) on April 23, opposed the December 22 notice, arguing that it was not part of the scheme’s original standard operating procedure and significantly increased the paperwork burden.

 

Automakers said each new DVA certification required manufacturers to collect fresh documentation from suppliers across the value chain, a process that could take months.

 

A senior ministry official who chaired the April 23 meeting asked the testing agencies whether the industry had been consulted before the document was issued.

 

The ARAI, one of the testing agencies present at the meeting, admitted that no stakeholder consultation had taken place. The official then told the agencies that the scheme did not distinguish between vehicles sold domestically and those exported, and asked them to review the December communication.

 

In its notice issued on Monday afternoon, ARAI also eased the procedure for export variants that differ from their domestic counterparts in terms of certain components used in the vehicle. Such cases will be treated as “variants” under the existing certification framework, it said.

 

This means manufacturers will no longer have to approach testing agencies as though such an export model were an entirely new product, reducing the amount of documentation and scrutiny required.

 

According to ARAI’s Monday notice, a fresh application will be needed only when there is no previously certified domestic model. In such cases, the export model will become the base model for future variant assessments.

 

The auto PLI scheme was approved by the Union Cabinet on September 15, 2021, with an outlay of ₹25,938 crore over five years to promote domestic manufacturing of advanced automotive technologies through incentives linked to incremental sales.

 

Of the 115 applicants, 82 companies — including vehicle manufacturers and auto component firms — were approved. Under the rules, an automaker has to sell at least ₹125 crore worth of eligible vehicles in the first year and increase those sales by at least 10 per cent annually to continue receiving incentives.