The Indian government has opted to remove a dozen companies from its Production Linked Incentive (PLI) scheme for the automobile and auto components sector. Among the notable exclusions is Kia, a South Korean automaker that has not made any investments in India under the Auto PLI initiative. This ambitious program, with a budget of ₹26,000 crore, aims to enhance domestic automobile manufacturing. Kia India's lack of investment in the Auto PLI scheme has led to its exclusion, resulting in the loss of bank guarantees valued between ₹1-2 crore.

Launched in 2021, the Auto PLI scheme was designed to promote local manufacturing of automobiles and their components in India. Industry stakeholders had pledged over ₹75,000 crore towards this initiative. However, at least 12 companies, including Kia, which was designated as a champion Original Equipment Manufacturer (OEM), failed to fulfill their investment commitments, leading to their removal from the program, as reported by LiveMint.

The Auto PLI scheme's objective was to establish a robust ecosystem for the automotive sector, encompassing not only physical infrastructure but also investments in research and development (R&D). According to reports, in the fiscal year 2024, the auto industry requested only ₹500 crore in investments during the first year of claims, a modest figure given the scheme's total allocation of approximately ₹26,000 crore over five years.

Kia has not yet issued an official statement regarding its exclusion from the Auto PLI scheme. The absence of investments may be attributed to a shift in strategy or investment priorities. Currently, Kia maintains a strong presence in India's utility vehicle market with models such as the Seltos, Sonet, Carens, and the recently introduced Syros. Additionally, the company offers the premium MPV, Kia Carnival, and has two electric vehicles available in India, namely the EV9 and EV6.

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