Bernstein Urges End Of Auto PLI Scheme, Calls For Higher ICE Taxes And Stronger EV Push

Foreign brokerage Bernstein has urged the Indian government to discontinue the production-linked incentive (PLI) scheme for the automobile sector. It argued that domestic auto manufacturers are financially strong and do not require production subsidies to support manufacturing expansion or electrification efforts.

The firm said Indian automakers are increasingly relying on imported battery packs and cells, particularly from China, instead of investing in domestic R&D and capital expenditure. It even suggested that if companies seek future PLI support, the government could consider taking equity stakes in such cash-rich firms to ensure accountability.

Bernstein also recommended a phased policy shift away from internal combustion engine (ICE) vehicles, including gradual tax increases on them and stronger incentives for electric vehicles. It added that energy transition policies should extend beyond transport to areas like household cooking, to reduce import dependence and improve overall energy security.