Centre to reopen PLI scheme for ACs, LED lights

The application window for the PLI Scheme for White Goods (ACs and LED Lights) is being reopened based on the appetite of the industry to invest more under the scheme, which is an outcome of the growing market and confidence generated due to manufacturing of key components of ACs and LED Lights in India, the ministry of commerce and industry says.

The application window for the scheme will remain open for the period from July 15, 2024 to October 12, 2024.

In order to avoid any discrimination, both new applicants as well as existing beneficiaries of PLIWG who propose to invest more by way of switching over to higher target segment or their group companies applying under different target segment would be eligible to apply, the ministry says.

The applicant approved in the proposed third round would be eligible for PLI for maximum three years only in the case of new applicants and existing beneficiaries opting for an investment period up to March 2023 seeking to move to a higher investment category. Existing beneficiaries opting for investment period up to March 2022 seeking to move to a higher investment category in the proposed third round would be eligible for PLI for a maximum two years only. Existing beneficiaries opting for the above, in case they are not able to achieve the threshold investment or sales in a given year will be eligible for submitting the claims as per their original investment plan. However, this flexibility will be provided only once during the Scheme period.

Further, to maintain liquidity in the business, better working capital management, and enhance the operational efficiency of beneficiaries, it has been decided to introduce the system of Quarterly claims processing of PLI in place of processing of claims on Annual basis.

So far, 66 applicants with committed investments of ₹6,962 crore have been selected as beneficiaries under the PLI scheme. For manufacturing components of air conditioners (ACs) companies like Daikin, Voltas, Hindalco, Amber, LG, Blue Star, Panasonic and Chinese companies such as Haier and Midea have invested.

In manufacturing components of LED lights, companies like Dixon, Surya, Orient, Crompton Greaves, etc. have invested. These investments will lead to manufacturing of components of Air Conditioners and LED Lights across the complete value chain including components which are not manufactured in India presently with sufficient quantity.

In October 2023, the ministry changed the norms governing the production-linked incentive (PLI) scheme for white goods with a view to simplify the scheme’s operations as well as to improve the ease of doing business.

The PLI Scheme on white goods is designed to create a component ecosystem for the air conditioners and LED lights industry in India and make India an integral part of the global supply chains. The scheme extends an incentive of 6% to 4% on a reducing basis on incremental sales for a period of five years subsequent to the base year and one year of the gestation period, the commerce ministry says. Domestic value addition is expected to grow from the current 15-20% to 75-80%.

The PLI scheme for white goods for the manufacture of components and sub-assemblies of ACs and LED Lights was approved by the Union Cabinet chaired by the Prime Minister on April 7, 2021.