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.
As many as 52 companies – including Daikin, Panasonic, Hitachi, Voltas, Mettube, Nidec and Havells — have pledged investments of Rs 5,886 crore under the production-linked incentive (PLI) scheme for white goods, the department for the promotion of industry and internal trade (DPIIT) said on Thursday.
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 selection of eligible candidates will be completed by November 15, the DPIIT said. The PLI scheme was notified on April 16 and its guidelines were published on June 4. Interested investors had time up to September 15 to apply for the scheme.
As many as 31 companies have committed investments of about Rs 4,995 crore for AC parts, while 21 have pledged to invest Rs 871 crore in LED components. Some of the investors are Amber, EPack, TVS-Lucas, Dixon, RK Lighting, Uniglobus, Radhika Opto, Syska.
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 is expected to result in production of about Rs 2,71,000 crore of components of ACs and LEDs. It will generate about 2 lakh direct and indirect jobs over five years. It’s also expected to raise the level of domestic value addition in these segments from the current 15-20% to 75-80%.
The companies have filed the applications for the production of 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.
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. The schemes, put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years.