PLI scheme for white goods records 43% MSME applicants

The recent round of online applications for the PLI scheme for white goods, covering Air Conditioners and LED lights, attracted 38 applicants with a total committed investment of Rs 4,121 crore. According to the Commerce Ministry, the application window, which opened on July 15, 2024, and closed on October 12, 2024, saw 43% of new applicants from the MSME sector.

Image Credit: Adobe

The third round of the online application window for the Production-Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED lights) concluded on October 12, 2024, attracting 38 responses with a net committed investment of Rs 4,121 crore over 90 days from July 15, 2024. Notably, 43% of the new applicants are from the MSME sector, reflecting their confidence in joining the AC and LED light manufacturing value chain. Launched by the Department for Promotion of Industry and Internal Trade (DPIIT), the scheme aims to boost domestic manufacturing.

Among the applicants, eight existing beneficiaries of the PLI Scheme for White Goods committed an incremental investment of Rs 1,285 crore, while 30 new applicants pledged Rs 2,836 crore to produce critical components across 13 states, including Jammu & Kashmir and Odisha. Investments will be distributed across 54 districts at 174 locations, with significant manufacturing clusters emerging in Noida-Greater Noida (UP), Neemrana and Bhiwari (Rajasthan), Aurangabad-Pune (Maharashtra), Sanand (Gujarat), and Sri City (Andhra Pradesh).

The scheme boasts a mix of multinational and domestic companies, with five foreign firms investing Rs 245 crore alongside 15 existing companies contributing Rs 2,287 crore. Overall, the PLI Scheme is projected to generate approximately Rs 11,083 crore in investments within the AC and LED light component manufacturing ecosystem, leading to around 80,486 direct jobs and an estimated total production value of Rs 1,81,975 crore.

Regarding the bifurcation between ACs and LED lights, 21 applicants focused on AC components with a total investment of Rs 3,679 crore, while 18 applicants for LED components committed Rs 442 crore. Significant investments in the AC sector will produce high-value intermediates such as copper tubes, aluminum stock for heat exchangers, and compressors, which together comprise nearly 50% of the bill of materials for room ACs. In the LED segment, production will include LED chip packaging, drivers, heat sinks, and light management systems.

The enthusiastic industry response to the PLIWG Scheme can be attributed to continuous engagement through meetings, interactions with vendors, and support from Indian ambassadors abroad. The application window was reopened due to increased industry appetite for investment. The PLI scheme aims to create a robust domestic component ecosystem, enhancing India’s role in global supply chains while increasing domestic value addition from 15-20% to 75-80%. To date, 66 applicants with a committed investment of Rs 6,962 crore have been selected as beneficiaries.