The PLI Scheme for White Goods (Air Conditioners and LED lighting) was approved by the Union Cabinet on April 7, 2021, with an outlay of Rs. 6,238 Crore. This initiative is intended to support the Prime Minister’s vision of “Atmanirbhar Bharat” and would be executed over the course of FY 2021–22 to FY 2028–29.
The Department for Promotion of Industry and Internal Trade (DPIIT) is now executing one of the 14 PLI Schemes of the Government of India, namely the PLI Scheme for White Goods (Air Conditioners and LED lights). M/s IFCI Ltd. (a public financial institution) has been designated as the Scheme’s Project Management Agency (PMA).
64 Applicants with committed investment of Rs. 6,766 crore have been approved as beneficiaries under the scheme.
A central design aspect of the scheme is that it does not incentivise production of finished goods. Only manufacturing of components and sub-assemblies are incentivized under the Scheme. It will lead to increase in domestic value addition from 20-25% to 75-80% at the end of the Scheme.
Investors were given option to choose one of the two gestation period i.e. up to March 2022 (one year) and up to March 2023 (two years). Regular stakeholder review meetings are organized with PLI beneficiaries ensuring that the issues of the companies are resolved in a timely and effective manner. On 3rd February 2024, Hon’ble Union Commerce and Industry had reviewed the progress of implementation of 14 PLI Schemes of the Govt. of India including the PLI Scheme on White Goods.
Investors were given option to choose one of the two gestation period i.e. up to March 2022 (one year) and up to March 2023 (two years). It may be noted that all 15 Projects (100% companies who have opted for Gestation Period 2021-22) have been commissioned. They have achieved 234% of their total threshold investment. On the overall, about 40% of investment have been achieved in less than 3 years of implementation out of 7 years.
Companies opting for one year of gestation period are eligible for PLI in the current year FY 2023-24 based on achieving the threshold investment and net incremental sales in FY 2022-23. Their online applications are under examination by the PMA. The PLI will be disbursed by March 2024. There is no delay in PLI disbursement under the Scheme.
The Scheme has attracted a healthy mix of multinational and domestic companies committing to develop a robust component ecosystem in India. 13 foreign owned companies (Daikin, Panasonic, Mitsubishi, Hitachi, Nidec, LG and Met Tube etc.) have committed to invest Rs. 2,090 crore about 30% of total committed investments.
As on date, investments have been done in 26 states; 45 districts; 128 locations across India. The PLI scheme has played a crucial role in generating employment opportunities across India. The Scheme is expected to create about 47,851 direct jobs. As against that, in less than three years 41,739 direct jobs have been created. Total actual production of Rs. 7,957 Crore has been done by the beneficiaries by December 2023.
The Scheme is leading to development of robust component ecosystem in India. Investments in Air Conditioners is leading to manufacturing components across the complete value chain including components which are not manufactured in India presently with sufficient quantity.
At present, there is insignificant manufacturing of certain high value components of ACs like Compressors, copper tubing, aluminium stock for foils. Many other components like control assemblies for indoor units (IDU) or outdoor units (ODU), display units, brushless direct current motors, valves etc. are not manufactured in enough quantity.
All these components will now be manufactured in India in significant quantities. Similarly, LED Drivers, LED Engines, LED Light Management Systems, PCBs including metal clad PCBs and Wire wound inductors etc. will be manufactured in India in high quantities.
This is a huge step forward for Atmanirbhar Bharat in important sectors of economy. It may also be noted that DPIIT interacts closely and monitors the functioning of the PMA of the Scheme.
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