PLI Scheme for White Goods (Air Conditioners & LED Lights)
Kartavya Desk Staff
Source: News on Air
Subject: Government Scheme
Context: The Government of India has selected five companies in the fourth round of the Production-Linked Incentive (PLI) Scheme for White Goods, involving a committed investment of ₹863 crore.
About PLI Scheme for White Goods (Air Conditioners & LED Lights):
What is the PLI Scheme for White Goods?
• The Production-Linked Incentive (PLI) Scheme for White Goods is a central sector scheme that provides performance-linked financial incentives to companies manufacturing key components of Air Conditioners (ACs) and LED lights in India, based on incremental sales.
Launched in: FY 2021–22, with implementation till FY 2028–29.
Nodal organisation:
• Implementing Ministry: Ministry of Commerce and Industry
• Monitoring authority: Empowered Group of Secretaries (EGoS), chaired by the Cabinet Secretary
Target segments (PLI Scheme for White Goods):
Air Conditioners:
• High-value intermediates: Capital- and technology-intensive core inputs like compressors, copper tubes, aluminium foils that drive value addition and reduce import dependence.
• Low-value intermediates: Supporting electronic and mechanical parts such as PCB assemblies, BLDC motors, service valves and cross-flow fans essential for AC functionality.
• Sub-assemblies (IDUs & ODUs): Integrated components for Indoor and Outdoor Units, enabling deeper domestic supply-chain integration.
LED Lights:
• Core components: Critical electronic elements like LED chip packaging, ICs, resistors and fuses that determine efficiency, lifespan and performance.
• Other components: Enabling parts such as LED drivers, engines, modules, mechanicals and wire-wound inductors, supporting end-product manufacturing.
Key features:
• Financial incentive: 4%–6% incentive on incremental domestic sales encourages scale-based manufacturing growth.
• Base year (FY 2019–20): Serves as the benchmark to measure incremental investment and sales performance.
• Incentive period: 5 years + 1-year gestation allows time for capacity creation before reward linkage.
• Eligibility: Limited to greenfield or brownfield manufacturing investments to ensure real asset creation.
• Mandatory thresholds: Firms must meet both investment and sales targets to qualify, ensuring accountability.
• Priority criteria: Core component manufacturing and large investments are favoured to deepen value chains.
• Fund-limited design: Incentives are capped at Cabinet-approved outlay, ensuring fiscal discipline.
Coverage and scale:
• Total outlay: ₹6,238 crore, reflecting focused but strategic industrial support.
• Beneficiaries: 85 companies selected across four rounds, indicating strong industry response.
• Expected investment: Around ₹11,198 crore, signalling crowd-in of private capital.
• Expected production: Nearly ₹1.9 lakh crore, enhancing domestic manufacturing output.
• Employment impact: Significant direct and indirect job creation across electronics and appliance value chains.