The government has ‘provisionally selected’ 42 air-conditioner and LED manufacturers, including Daikin, Blue Star, Panasonic, Syska and Orient Electric, with committed investment of ₹4,614 crores as beneficiaries under the Production-Linked Incentive (PLI) scheme for white goods, as per an announcement on Wednesday.
“The approved investments of ₹4,614crore are likely to generate net incremental production of around ₹81,254 crore and direct employment for about 44,000 people,” the Minister of Commerce and Industry said in a statement.
The scheme will be implemented over a seven-year period, from FY22 to FY29 and has an outlay of Rs 6,238 crore. The government expects the scheme to lead to incremental production to exceed Rs 81,254 crore and create direct employment opportunities for 44,000 people.
Under the scheme, eligible investors in air-conditioners, LED lights and such components will get incentives of 4-6% on incremental sales (to be calculated over the base year of 2019-20) of products manufactured in India. The total incentives of Rs 6,238 crore will be disbursed over five years.
The statement added that a total of 52 companies had filed applications with committed investment of ₹5,858 crores under the scheme and after evaluation of all the applications, 42 firms have been provisionally selected as beneficiaries. The selected applicants include 26 for air-conditioner manufacturing with committed investments of ₹3,898 crores and 16 for LED Lights manufacturing with committed investments of ₹716 crores.
Applicants provisionally selected include Daikin Airconditioning India, Amber Enterprises India Ltd, PG Technoplast, Hindalco Industries, Mettube India, Blue Star Climatech, Havells India, Johnson Controls Hitachi Air Conditioning India Ltd, Voltas, Bhagwati Products, IFB Industries, Panasonic India, Dixon Technologies, Syska LED Lights, Surya Roshni and Orient Electric.
The PLI Scheme for White Goods for the manufacture of components and sub-assemblies of ACs and LED Lights was approved by the Cabinet on April 16 this year. Its guidelines were published on June 4. Interested investors had time up to September 15 to apply for the scheme.
The incentives will flow in from the next fiscal at 6% (if the investments start from FY22) and will be reduced to 5% by FY25 and then to 4% in FY27.
The scheme was expected to raise the level of domestic value addition in these segments from the current 15-20% to 75-80%.
The companies will produce components that are not currently manufactured in India. For ACs, several companies will be manufacturing compressors, copper tubing, aluminium stock for foils, display units, among others. Similarly, for LED lights, the applicants will invest in LED chip packaging, drivers, engines, light management systems, among others. “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,” it said.
Similarly, 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 in high quantities.
“Six applicants proposing FDI from countries sharing land border with India have been advised to submit approval for FDI for consideration of approval under the PLI Scheme.
Four applicants are being referred to the Committee of Experts (CoE) for examination and its recommendations,” the Ministry added.
This is part of the 13 PLI schemes, announced by the government in the wake of the Covid-19 pandemic last year, to lure mainly large corporations to expand manufacturing, bolster supply chains and boost exports. The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles, were initially estimated at Rs 1.97 lakh crore over a five-year period.