The Department for Promotion of Industry & Internal Trade (DPIIT) said 42 firms with committed investment of Rs 4,614 crore have been provisionally selected as beneficiaries under the production linked incentive (PLI) scheme for the white goods sector.
A total of 52 companies had filed applications with committed investment of Rs 5,858 crore under the scheme.
White goods industry in India
• White goods refer to heavy consumer durables or large home appliances, which were traditionally available only in white. They include appliances such as washing machines, air conditioners, stoves, refrigerators, etc.
• The white goods industry in India is highly concentrated. Indian appliance and consumer electronics (ACE) market reached Rs 76,400 crore in 2019. Appliances and consumer electronics industry is expected to double to reach Rs 1.48 lakh crore by 2025.
• India has a growing consumer goods ecosystem where major brands have pushed for local manufacturing as consumers seeking simple and convenient consumer goods. India also has an improving infrastructure ecosystem for manufacturers as more industrial parks are established.
• India imports white goods primarily from China, Thailand, and Vietnam in the sector. India’s biggest export destinations in white goods are United Arab Emirates, Sri Lanka, and the United States.
PLI scheme for white goods
• The prime objective of the PLI scheme is to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale, and ensuring efficiencies.
• It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains.
• The scheme is expected to attract global investments, generate large-scale employment opportunities and enhance exports substantially.
• It will be implemented over a seven-year period from 2021-22 to 2028-29 and has an outlay of Rs 6,238 crore, which was approved by the Cabinet.
• DPIIT is the nodal department for the PLI scheme for white goods.
• It is estimated that the scheme will lead to an incremental investment of Rs 7,920 crore, incremental production worth Rs 1,68,000 crore, exports worth Rs 64,400 crore, earn direct and indirect revenues of Rs 49,300 crore and create additional four lakh direct and indirect employment opportunities.
• The scheme shall extend an incentive of 4 per cent to 6 per cent on incremental sales of goods manufactured in India to companies engaged in manufacturing of air conditioners and LED lights.
• Mere assembly of finished goods will not be incentivised.
• Companies meeting the pre-qualification criteria for different target segments will be eligible to participate in the scheme. Incentives shall be open to companies making brownfield or greenfield investments.
Other key points:
• The investments in air conditioners will lead to manufacturing components across the complete value chain including components which are not manufactured in India with sufficient quantity.
• At present, there is insignificant manufacturing of certain high value components of ACs like compressors, copper tubing and aluminium stock for foils.
• Many other components like control assemblies for indoor units (IDU) or outdoor units (ODU), display units, brushless direct current motors and valves are not manufactured in enough quantity.
• All these components will now be manufactured in India in significant quantities. Similarly, LED chip packaging, LED drivers, LED engines, LED light management systems, PCBs including metal clad printed circuit boards (PCBs) and wire wound inductors, etc will be manufactured in India in high quantities.