Government approves over Rs 6,000 cr PLI package for air conditioners and LED lights

The government has approved a production linked incentive (PLI) scheme worth Rs 6,238 crore for white goods – air conditioners and LED lights. This scheme will make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies.

Piyush Goyal, the Commerce and Industry Minister, said the approval of the scheme for ACs and LEDs will boost the domestic manufacturing. It will create a complete component ecosystem in India and make India an integral part of the global supply chains. Moreover, the scheme is expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

An official government statement said the PLI scheme for white goods shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India for a period of five years to companies engaged in manufacturing of ACs ad LED lights. It stated that selection of companies for the scheme will be done to incentivize manufacturing of components or sub-assemblies, which are not manufactured in India presently with sufficient capacity.

“Companies meeting the pre-qualification criteria for different target segments will be eligible to participate in the scheme. Incentives shall be open to companies making brownfield or Greenfield investments; thresholds of cumulative incremental investment and sales of manufactured goods over the base year would have to be met for claiming incentives.”

Furthermore, the scheme is expected to be instrumental in achieving growth rates that are much higher than the existing ones for AC and LED industries, develop complete component eco-systems in India and create global champions manufacturing in India.

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It has to be noted that companies will have to meet the compulsory Bureau of Indian Standards (BIS) and BEE quality standards for sales in the domestic market and applicable standards for global markets. And it is estimated that over five years, the scheme will lead to an incremental investment of Rs 7,920 crore, incremental production worth Rs 1,68,000 crore, exports worth Rs 64,400 crore earn direct and indirect revenues of Rs 49,300 crore and create additional four lakh direct and indirect employment opportunities.