The government is set to roll out the second phase of the PLI scheme for the white goods sector. The total outlay for this scheme is Rs 6,238 crore.

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In the first round, 42 applications with a committed investment of Rs 4,614 crore were selected.

In the second round, 19 companies including LG Electronics, Mitsubishi Electric, Adani Copper Tubes and Crompton Greaves have applied for this scheme. Committed investments by these 19 companies in the second round is Rs 1,548 crore. The aim of this scheme is to incentivise manufacturing of components of air conditioners (ACs) and LED lights.

In an interview to CNBC-TV18, Anil Agrawal, Additional Secretary at DPIIT said, “The PLI scheme for white goods is focusing on development of the component ecosystem of air conditioners and LED lights. The ACs that we produce in India today, the local value addition is only about 25 percent and we import most of the critical components. So what we have done is, the bill of material of about 90 percent of components in ACs is incentivized through this scheme."

Agrawal said, “We have seen very good response to the scheme. In the first round of applications, we had global brands and some of the best Indian companies coming in for investment of about Rs 4,600 crore. We also have about 6 companies whose applications for about Rs 912 crore are under FDI approval. So we are looking at a total investment of about Rs 7,000 crore only into the component manufacturing of ACs and LED lights.”

Mukundan Menon, President & COO of Cooling and Purification Appliances at Blue Star said, “Blue Star has two manufacturing facilities in Himachal Pradesh. We manufacture roughly 5 lakh units per year. So we are investing roughly Rs 525 crore in a new plant near Chennai where we will be manufacturing 12 lakh units per year. The PLI benefit that we will be getting out of this is to the tune of about Rs 72-73 crore spread over a 5 year period. We think this is a significant incentive and will stop our imports from China.”

Jasbir Singh, CEO of Amber Enterprises said, “This PLI is very well structured and well thought out. Because of this PLI, 75-80 percent of value addition will start happening in India. So this PLI is going to give a very big compounding impact on the local component ecosystem.”

“The PLI scheme will not only make the domestic manufacturing of ACs more profitable but will also enable AC manufacturers to be competitive on the export front as the economies of scale build up and incentives start flowing in”, Singh added.

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First Published:Apr 27, 2022 8:06 PM IST