LEDs... and ACtion: White goods PLI may see light of day, again

Kolkata: The government is considering a plan to reopen the production-linked incentive scheme for white goods (PLIWG) after a slow start to domestic manufacturing of some high-value components such as compressors, copper tubes and aluminium foils. The scheme aims to boost the production of air-conditioner and LED light components.

The Department for Promotion of Industry and Internal Trade (DPIIT) has approached some of the large companies in the industry and beneficiaries of the scheme on how much they would want to invest if the scheme is reopened. Industry executives said around Rs 1,500 crore of the PLIWG incentive corpus is unallocated.

That is because of the relatively fewer proposed investment projects in highvalue components. Also, of the proposed investments of Rs 6,766 crore, about Rs 2,000 crore hasn’t taken shape. The government wants to utilise the unallocated incentive corpus to attract high-value investment, they said. The PLIWG scheme has an outlay of Rs 6,238 crore to be implemented over FY22 to FY29.

DPIIT DIDN’T RESPOND TO QUERIES.

The PLI schemes in various sectors are part of the government’s strategy to encourage big investments in domestic manufacturing to gain knowhow, reduce dependence on imports and create jobs. A senior DPIIT officer earlier this month sent a WhatsApp message directly to the chief executives of several of the large companies that it “would like to assess the appetite of the industry to invest further under the PLIWG Scheme on the same terms and conditions as stipulated in the scheme guidelines”. The message further said: “We will appreciate if you can share your intention to invest either through a new entity or raising investments level in the higher target segment in the existing entity on my email or on my WhatsApp.”

It said the room air-conditioner and LED lights manufacturing industry in India “is poised for significant growth, supported by favourable economic conditions, global warming, government initiatives, and evolving consumer preferences”. ET has reviewed the DPIIT communication.

Several of the large companies have already responded with fresh investment proposals. PLIWG is only focussed on components and not finished goods, and the government expects domestic value addition to grow from the current 15-20% in FY22 to 75-80% by FY29 in ACs and LED lights. To be sure, the scheme is regarded as a success with current value addition at around 40-45%, according to industry executives.

“Thanks to the PLIWG scheme, India has completely stopped import of components such as heat exchanger, inverter PCB board, sheet metal, injection moulding, cross flow fan and motors,” said Jasbir Singh, chief executive at Amber Enterprises, the country’s largest AC contract manufacturer.

“The missing link in domestic production is high-value components like compressors, inner grooved copper tubes and aluminium foils for heat exchangers which are still imported.” Panasonic India chairman Manish Sharma said the PLIWG has been one of the most successful PLI schemes with significant value addition happening but some critical components are still getting imported.