Giving a push to PM Modi’s Atmanirbhar Bharat mission, the Centre has received a good response for the PLI scheme for white goods components.
Total 52 companies have filed their application with a committed investment of Rs 5,866 crore under the Production-Linked Incentive (PLI) scheme to incentivise the domestic manufacturing of components of white goods (air conditioners and LED lights), applications for which closed on 15th September 2021.
Several companies like Daikin, Panasonic, Hindalco, Hitachi, Mettube, Nidec, Voltas, Bluestar, Havells, Amber, EPack, TVS-Lucas, Dixon, R K Lighting, Uniglobus, Radhika Opto, Syska among others have applied for manufacturing critical components of Air conditioners and LED Lights.
The budgetary outlay of the scheme is Rs 6,238 crore. Any unutilised amount from the scheme allocation will be reviewed later.
As many as 31 companies have committed investments of about Rs 4,995 crore for AC components and 21 companies have committed investments of Rs 871 crore for LED components.
For ACs, several companies will be manufacturing compressors, copper tubing, aluminium stock for foils, control, display units, among other components.
Similarly for LED Lights, LED Chip packaging, LED drivers, LED engines, LED light management systems, wire wound inductors, among others will be manufactured in India.
Applications have been filed for the production of components that are not manufactured in India presently with sufficient capacity. For Air Conditioners, several companies will be manufacturing compressors, copper tubing, aluminium stock for foils, control assemblies for IDU or ODU, display units, BLDC motors among other components.
Similarly, for LED lights, LED chip packaging, LED drivers, LED engines, LED light management systems, PCBs including metal-clad PCBs and wire-wound inductors etc. will be manufactured in India.
PM Modi led Union Cabinet 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 7th April 2021.
The scheme was notified by DPIIT on 16th April this year. Govt says that the selection of applicants will be done within 60 days from the date of closure of the application window i.e. by 15th November this year.
The PLI scheme shall extend an incentive of 4% to 6% on incremental sales for a period of five (5) years subsequent to the base year and one year of gestation period.
Only the manufacturing of components of ACs and LED Lights will be incentivized under the scheme. Under the scheme, govt made it clear that mere assembly of finished goods is not being incentivized.
The scheme will incentivize manufacturing of components of ACs and LED Lights. 90% Bill of Material (BoM) of ACs and 87% of BoM of LED lights are covered under PLI scheme.
Over the next 5 years, the scheme is expected to lead to a total production of about INR 2,71,000 crore of components of ACs and LEDs.
The scheme will bring additional investment in the component manufacturing eco-system of ACs and LED Lights industry to the tune of INR 5,886 crore. 31 companies have committed investments of about Rs 4995 cr for AC components and 21 companies have committed investments of Rs 871 cr for LED components.
The scheme will generate approx. 2 lakh direct and indirect employment opportunities in the next 5 years. Domestic Value Addition is expected to grow from the current 15-20% to 75-80%
