The government is expected to start disbursement of fiscal incentives under production-linked incentive (PLI) scheme for white goods in the last quarter of this financial year.

The PLI scheme for white goods seeks to encourage domestic manufacturing of air conditioners and LED light components.

The scheme is to be implemented over a seven-year period, from 2021-22 to 2028-29 and has an outlay of Rs 6,238 crore.

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 the 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.

• The Department for Promotion of Industry and Internal Trade (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. 

• Altogether, the scheme will bring investment in the component manufacturing eco-system of ACs and LED Lights industry to the tune of Rs 7,074 crore and generate about 2 lakh direct and indirect employment opportunities.

• The scheme is expected to lead to a total production of components of ACs and LED lights in India of about Rs 1,07,134 crore.

PLI schemes

An outlay of Rs 1.97 lakh crore has been announced for Production Linked Incentive (PLI) schemes for 14 key sectors for a period of five years starting from FY 2021-22.

These sectors are:

1) Mobile manufacturing and specified electronic components (Large scale electronics manufacturing)

2) Critical key starting materials/drug intermediaries & active pharmaceutical ingredients

3) Manufacturing of medical devices 

4) Automobiles and auto components

5) Pharmaceuticals

6) Specialty steel

7) Telecom and networking products

8) Electronic/technology products

9) White goods (ACs and LEDs)

10) Food products

11) Textile products: man-made fibre (MMF) segment and technical textiles

12) High efficiency solar PV modules

13) Advanced Chemistry Cell (ACC) battery.

14) Drones and drone components.

• The objectives of PLI schemes are 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 schemes are expected to attract global investments, generate large scale employment opportunities and enhance exports substantially.

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