The Union Cabinet on Wednesday approved Production Linked Initiative sceheme for auto and auto components industries.
The scheme will also be applicable for the drone industry.
The overall budgetary outlay for the scheme for these sectors will be Rs 26,058 crore.
According to the government, the scheme will incentivise emergence of advanced automotive technologies global supply chain in India and bring fresh investments of over Rs 42,500 crore in five years.
It will also lead to an incremental production of over Rs 2.3 lakh crore.
The PLI scheme for drones will bring in fresh investments of over Rs 5,000 crore in three years and incremental production of over Rs 1,500 crore.
As per the government, the auto PLI scheme will enable India to leapfrog to environmentally cleaner, electric vehicles, and hydrogen fuel cell vehicles.
It will also bost in the manufacturing of electic vehicles and create additional employment of over 7.6 lakh crore.