A total of 52 companies have filed their application under the PLI scheme to incentivize the domestic manufacturing of components of white goods.
A total of 52 companies have filed their application with committed investment of Rs 5,866 crore under the PLI scheme to incentivize the domestic manufacturing of components of white goods (air conditioners and LED lights), applications for which closed on 15 September, 2021.
Several companies like Daikin, Panasonic, Hitachi, Mettube, Nidec, Voltas, Bluestar, Havells, Amber, EPack, TVS-Lucas, Dixon, R K Lighting, Uniglobus, RadhikaOpto, and Syska, among others, have applied for manufacturing critical components of air conditioners and LED lights.
Applications have been filed for production of components, which are not manufactured in India presently with sufficient capacity. For air conditioners, several companies will be manufacturing compressors, copper tubing, aluminum stock for foils, control assemblies for IDU or ODU, display units, and BLDC motors. Similarly, for LED lights, LED chip packaging, drivers, engines, light management systems, PCBs including metal clad PCBs, and wire wound inductors will be manufactured in India.
The Union Cabinet, chaired by Hon’ble Prime Minister, has given approval to the Production-Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED lights) to be implemented over FY 2021-22 to FY 2028-29 with an outlay of Rs. 6238 Crore on April 7, 2021. The Scheme was notified by DPIIT on April 16, 2021. The Scheme Guidelines were published on June 4, 2021. Online application have been received from June 15, 2021 until September 15, 2021. The selection of applicants will be done on November 15, 2021.
The PLI Scheme on White Goods is designed to create complete component ecosystem for air conditioners and LED lights industry in India, and make the country an integral part of the global supply chains. The Scheme shall extend an incentive of 4% to 6% on incremental sales for a period of five years subsequent to the base year and one year of gestation period. Only manufacturing of components of ACs and LED lights will be incentivized under the Scheme. About 90% of the bill of materials (BoM) of ACs and 87% of BoM of LED lights are covered under the Scheme, which is expected to result in an increase in value addition in the country from 20% to 80-85%, and developing a robust component ecosystem for the AC industry and LED lights industry.
Selection of companies for the Scheme shall be done so as to incentivize manufacturing of components or sub-assemblies that are not manufactured in India presently with sufficient capacity. Mere assembly of finished goods is not being incentivized.
Over the next five years, the Scheme is expected to lead to total production of about INR 2,71,000 crore of components of ACs and LEDs. The scheme will bring additional investment in component manufacturing ecosystem of ACs and LED lights industry to the tune of INR5,886 crore. About 31 companies have committed investments of about Rs4995 cr for AC components and 21 companies have committed investments of Rs871 cr for LED components.
The scheme will generate approximately 2 lakh direct and indirect employment opportunities in the next five years, and domestic value addition is expected to grow from the current 15-20% to 75-80%.