52 LED lights, AC cos apply for PLI scheme; Daikin, Panasonic, Syska among applicants


PTI | New Delhi | Updated: 16-09-2021 22:08 IST | Created: 16-09-2021 22:08 IST
52 LED lights, AC cos apply for PLI scheme; Daikin, Panasonic, Syska among applicants
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The government on Thursday said as many as 52 companies, including Daikin, Panasonic, Hitachi and Syska, have applied for availing production-linked incentives (PLIs) for white goods makers, proposing a total investment of around Rs 6,000 crore in the manufacturing of components for air conditioners and LED lights.

The selection of applicants will be done within 60 days from the date of closure of application window or by November 15, Additional Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Anil Agarwal told reporters here.

The Rs 6,238-crore scheme for white goods was approved in April. Online applications have been received from June 15 till September 15, he said.

''A total of 52 companies have filed their application with committed investment of Rs 5,866 crore under the PLI scheme to incentivize the domestic manufacturing of components of white goods (air conditioners and LED lights),'' he said.

Several companies like Daikin, Panasonic, Hitachi, Mettube, Nidec, Voltas, Bluestar, Havells, Amber, EPack, TVS-Lucas, Dixon, R K Lighting, Uniglobus, RadhikaOpto, and Syska, among others, have applied for manufacturing critical components of air conditioners and LED Lights, he added.

As many as 31 have applied for the AC segment and the remaining for LED lights.

Agarwal also said applications have been filed for production of components that are not manufactured in India currently with sufficient capacity.

For air conditioners, several companies will be manufacturing compressors, copper tubing, aluminium stock for foils, control assemblies for IDU or ODU, display units, and BLDC motors, among other components.

Similarly, for LED Lights, LED chip packaging, LED drivers, LED engines, LED light management systems, printed circuit boards (PCBs) including metal clad PCBs and wire wound inductors, will be manufactured in India.

Earlier, speaking on the issue, FICCI Electronics Manufacturing Committee Chairperson Manish Sharma said most of the investments are expected to happen in the next two-three years; and after that, local production for components for AC and LED light is expected to start.

This will not only help in saving the foreign currency, as the majority of the components in AC and LED lights are imported from countries as China and Taiwan, but also create job opportunities in the country.

Wednesday was the deadline for the industry to submit applications for the PLI scheme for white goods (air conditioners and LED lights).

''It is encouraging to see the industry response to the PLI scheme for component manufacturing in AC and LED.

''From the applications received, it seems that the industry stands to get an investment of nearly Rs 6,000 crore of which nearly Rs 5,000 crore is towards AC and Rs 1,000 crore towards LED,'' Sharma, who is president and CEO of Panasonic India & South Asia, told PTI.

Sharma was involved in the process as part of his role in the industry body FICCI.

''Participation of 52 companies, in this exercise matters a lot, which means that execution of this investment will diversify the components industry for both across high, medium and small intermediaries,'' said Sharma.

The timelines are such that the majority of the investments will happen in the next two to three years.

''This means that average domestic value addition for AC, which is around 20-25 per cent with local components of the product, will go up to 75 per cent in the next five years,'' he said.

This would save the cost and time of the industry from sourcing the components.

''As component manufacturing is a key beneficiary of the new policy, indigenous AC manufacturing will get a fillip. This will also enable design-led manufacturing, fuel innovation and drive component exports along with finished ACs from India.

''In the foreseeable future, I see a lot of exciting developments in component design capability and growth of the MSMEs (micro, small and medium enterprises) and SMEs,'' he said.

Sharma said that last year, the Indian AC market was pegged at around 7.5 million. ''Of this, 2.5 million were imports which have come down significantly due to ban on import of gas-filled ACs.'' ''I expect the market to touch nine million this year; and of this, 8-8.5 million will be manufactured locally,'' Sharma added.

Under the PLI scheme for white goods (air conditioners and LED lights), the government has approved a budgetary outlay of Rs 6,238 crore. This will be implemented over FY 2021-22 to FY 2028-29.

In air conditioners, support would be provided for AC components as copper tubes, aluminium foil and compressors. It will also provide incentives for low-value intermediates such as PCB assembly for controllers, BLDC motors, service valves and cross-flow fans for AC and other components.

While for LED lighting products, it is for core components like LED chip packaging, resistors, ICs, fuses and large-scale investments in other components.

The scheme would extend an incentive of 4 per cent to 6 per cent on incremental sales for a period of five years subsequent to the base year and one year of gestation period. Only manufacturing of components of ACs and LED Lights will be incentivized under the scheme.

''Selection of companies for the Scheme shall be done so as to incentivize manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity. Mere assembly of finished goods is not being incentivized,'' Agarwal said.

Over the next five years, he said, the scheme is expected to lead to total production of about Rs 2,71,000 crore of components of ACs and LEDs.

''The scheme will bring additional investment in component manufacturing eco-system of ACs and LED Lights industry to the tune of Rs 5,886 crore.

''Thirty-one companies have committed investments of about Rs 4,995 crore for AC components and 21 companies have committed investments of Rs 871 crore for LED components,'' he said.

Domestic value addition is expected to grow from the current 15-20 per cent to 75-80 per cent, he added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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