The third round of online applications for the Production-Linked Incentive (PLI) Scheme for White Goods, specifically for Air Conditioners (ACs) and LED lights, concluded on October 12, 2024. This round attracted 38 applicants, with a total committed investment of Rs 4,121 crore. Interestingly, 43 percent of these applicants are from the MSME sector, demonstrating a strong interest from small and medium enterprises in becoming a part of the supply chain for manufacturing AC and LED light components. The PLI scheme is administered by the Department for Promotion of Industry and Internal Trade (DPIIT).
Among the applicants, there are eight existing beneficiaries of the PLI scheme for White Goods, committing an additional Rs 1,285 crore, while 30 new applicants are committing Rs 2,836 crore to manufacture key components for ACs and LED lights. These investments span 13 states, including Jammu & Kashmir and Odisha, and involve 49 new locations. In total, the scheme will cover 54 districts across 18 states, with 174 locations identified for development. Key manufacturing clusters are emerging in areas such as Noida-Greater Noida (UP), Neemrana and Bhiwadi (Rajasthan), Aurangabad-Pune (Maharashtra), Sanand (Gujarat), and Sri City (Andhra Pradesh), the latter being nicknamed “Cooling City” due to its concentration of AC manufacturing. The scheme attracts a mix of multinational and domestic companies, with five foreign firms investing Rs 245 crore and 15 existing companies contributing Rs 2,287 crore.
Overall, the PLI scheme for White Goods is expected to bring a cumulative investment of Rs 11,083 crore into the AC and LED light component ecosystem, generating approximately 80,486 direct jobs. The scheme is also projected to boost the total production value of these components to around Rs 1,81,975 crore.
Regarding the breakdown of the investments, 21 applicants have applied for manufacturing AC components, with a committed investment of Rs 3,679 crore, while 18 applicants are targeting LED light components with investments worth Rs 442 crore. In the AC segment, substantial investments are being made in high-value intermediate components such as copper tubes, aluminium stock for heat exchangers, and compressors, which make up almost 50 percent of the bill of materials for room air conditioners. Additional components include control assemblies, heat exchangers, motors, sheet metal parts, and plastic-moulded components. Similarly, in the LED light segment, LED chips, drivers, heat sinks, and light management systems will be produced domestically, including components that were previously not manufactured in India at sufficient capacity.
Several applicants are established suppliers to major manufacturers like Daikin, Voltas, Blue Star, and LG Electronics in the AC sector, while others supply components for LED light producers such as Surya, Orient, Crompton Greaves, Signify, and Halonix. The positive industry response is credited to DPIIT’s proactive engagement with stakeholders, including one-on-one meetings, physical vendor gatherings, and coordinated outreach with foreign ambassadors to foster investment.
The application window was reopened to accommodate the growing appetite for investments under the PLI scheme, driven by an expanding market and the increasing confidence in domestic manufacturing of critical components. Both new applicants and existing beneficiaries were eligible to apply, provided they met the eligibility criteria stated in the Scheme Guidelines, which were published in June 2021 following the Cabinet’s approval in April of the same year.
The PLI scheme for White Goods, approved by the Union Cabinet and chaired by Prime Minister Narendra Modi, aims to develop a comprehensive component manufacturing ecosystem in India and integrate the country into global supply chains. The scheme, with an outlay of Rs 6,238 crore and effective from FY 2021-22 to FY 2028-29, intends to enhance domestic value addition from 15-20 percent to 75-80 percent.
So far, 66 applicants with a committed investment of Rs 6,962 crore have been selected as beneficiaries of the scheme. Prominent investors in AC component manufacturing include companies like Daikin, Voltas, Hindalco, LG, and Panasonic, while key players in LED light components include Dixon, Radhika Opto, Surya, and Signify. These investments will facilitate manufacturing across the entire value chain, including components that are not currently produced in sufficient quantities domestically.
Cover Photo: Dall-E
