PLI Scheme Boosts Indian Manufacturing with ₹3,516 Cr Investment in AC and LED Components

84 Companies Set to Bring ₹10,478 Crore Investments, Promising ₹1.73 Lakh Crore in Production

The Production-Linked Incentive (PLI) Scheme for White Goods has reached a new milestone in its third round, with 24 beneficiaries committing a total investment of ₹3,516 crore to boost the production of components for Air Conditioners (ACs) and LED lights in India. This initiative, under the aegis of the Department for Promotion of Industry and Internal Trade (DPIIT), is designed to strengthen India’s manufacturing capabilities and integrate the nation into global supply chains. Breakdown of Investments in the Third Round:

• Applications Received: 38 applications were submitted during the third round of the online application window.
• Companies Selected: 18 new companies were provisionally selected, including 10 manufacturers of AC components and 8 manufacturers of LED lights, with a committed investment of ₹2,299 crore.
• Upgraded Investment Commitments: Six existing beneficiaries have opted to upgrade to higher investment categories, pledging an additional ₹1,217 crore.
• Pending Applications: Thirteen applicants, including two existing beneficiaries, have been referred to the Committee of Experts (CoE) for further examination.
• Withdrawals: One applicant has withdrawn from the scheme.

Overall, the PLI Scheme now includes 84 companies that have collectively committed ₹10,478 crore in investments, leading to an anticipated production worth ₹1.73 lakh crore.

Sectoral Impact

The scheme aims to bolster domestic manufacturing of critical components for ACs and LED lights, including:

Air Conditioners

• Compressors
• Copper tubes (plain and/or grooved)
• Control assemblies for Indoor and Outdoor Units (IDU/ODU)
• Heat exchangers
• Brushless DC (BLDC) motors

LED Lights

• LED chip packaging
• LED drivers
• LED engines
• LED light management systems
• Metallized films for capacitors

This domestic production is expected to significantly enhance value addition in India, growing from the current 15-20% to an impressive 75-80%.

PLI Scheme Overview

The Union Cabinet approved the PLI Scheme for White Goods on April 7, 2021, with an outlay of ₹6,238 crore for the period FY 2021-22 to FY 2028-29. Officially notified by DPIIT on April 16, 2021, the scheme provides an incentive of 6% to 4% on a reducing basis for incremental sales over a five-year period, following a one-year gestation period.

Significance of the Scheme

The PLI Scheme is strategically designed to:

1. Strengthen Local Manufacturing: Build a robust ecosystem for AC and LED light components, reducing reliance on imports.
2. Enhance Economic Growth: Contribute to GDP and generate employment in the manufacturing sector.
3. Integrate India into Global Supply Chains: Position India as a competitive hub for white goods manufacturing globally.

Future Outlook

This initiative is expected to revolutionize the white goods industry in India, fostering innovation and sustainability while addressing global demands. By enhancing domestic capabilities and driving value addition, the PLI Scheme aligns with the government's vision of making India a self-reliant and globally competitive manufacturing hub.