Cabinet approves PLI Scheme for AC and LED lights

New Delhi: Taking another important step towards the vision of 'Atmanirbhar Bharat', the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the production linked incentive (PLI) scheme for white goods (such as air conditioners and LED lights) with a budgetary outlay of Rs 6,238 crore. 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.

The PLI scheme for white goods shall extend an incentive of 4 percent to 6 percent on incremental sale of goods manufactured in India for a period of five years to companies engaged in the manufacturing of air conditioners and LED Lights. Different segments have been earmarked for different types of components separately to specifically target global investments into desired areas. Selection of companies for the scheme shall be done so as to incentivise manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity. Only assembly of finished goods shall 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. Thresholds of cumulative incremental investment and incremental sales of manufactured goods over the base year would have to be met for claiming incentives.

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An entity availing benefits under any other PLI scheme, will not be eligible under this scheme for the same products but the entity may take benefits under other applicable schemes of the government or schemes of state governments. The scheme will be implemented as a pan-India scheme and is not specific to any location, area or segment of the population. A number of global and domestic companies, including a number of MSMEs are likely to benefit from the scheme.

The scheme is expected to be instrumental in achieving growth rates that are much higher than the existing ones for AC and LED industries, develop complete component eco-systems in India and create global champion manufacturers in India. They will have to meet the compulsory BIS and BEE Quality standards for sales into the domestic market and applicable standards for global markets. It will also lead to investments in innovation and research and development and up-gradation of technology.

It is estimated that over the period of five years, the PLI 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.

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