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What is the news?
Around 52 companies have applied for availing production-linked incentives (PLIs) for white goods makers, proposing an investment of around Rs 6,000 crore in the manufacturing of components for air conditioners and LED lights.
Most of the investments are expected to happen in the next two-three years; and after that, local production for components for AC and LED light is expected to start.
What are the potential benefits of PLI scheme for white good makers?
First, it will help in saving the foreign currency, reduce dependency on foreign countries and create job opportunities in the country.
Second, average domestic value addition for AC, which is around 20-25 per cent with local components of the product, will go up to 75 per cent in the next five years. This would save the cost and time of the industry from sourcing the components.
Third, it will enable design-led manufacturing, fuel innovation and drive component exports along with finished ACs from India.
Fourth, it will also enhance design capability and growth of the MSMEs (micro, small and medium enterprises).
What support domestic manufactures are likely to get?
First, in air conditioners, support would be provided for AC components as copper tubes, aluminium foil and compressors. It will also provide incentives for low-value intermediates such as PCB assembly for controllers, BLDC motors, service valves and cross-flow fans for AC and other components.
Second, for LED lighting products, support will be provided for core components like LED chip packaging, resistors, ICs, fuses and large-scale investments in other components.
Source: This post is based on the article “52 cos apply with Rs 6,000-cr investment proposals for AC, LED PLI scheme” published in the Business Standard on 16th September 2021.
