The introduction of the Performance Linked Incentive (PLI) Scheme will enable the automobile industry to move to higher value-added products, said Sundram Fasteners Ltd (SFL).
In its 59th annual report for FY22, the company said PLI was expected to ‘trigger faster growth’ and was expected to help India ‘leapfrog’ over parts of the global supply chain’ and ‘promote’ employment opportunities.
The electric vehicle (EV) segment had seen a ‘spectacular increase’ this year, it said. With the support from public investment, the PLI scheme was also expected to spur capital expenditure by the private sector.
According to SFL, the year ahead is poised for a pickup in private sector investment with the financial system in a ‘good position’ to provide support for the economy’s revival.
On the disruptions in the supply chain caused by novel coronavirus that had led to a worldwide surge in inflation, SFL the trend could linger for years, adding that mounting steel prices were expected to continue to impact margins in the first half of FY23.
All segments of the Indian automotive industry were expected to grow 10% during FY23, while tractors may expand in ‘high single-digits’, it said.
Asserting that the Indian economy was poised to grow at 7.9% in FY23, SFL said the growth numbers were predicated upon broad-basing of economic activity and another normal monsoon.
The said growth factors may, however, be curtailed due to slowing global economies, headwinds from the Russia-Ukraine war and higher commodity prices, especially of crude oil. This might put the supply chain at a serious threat leading to a drop in volumes, it warned.
