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PLI SCHEME FOR WHITE GOODS (AIR CONDITIONERS AND LED LIGHTS)

September 10, 2021

The Government’s goal towards an Atmanirbhar Bharat is centered on Production Linked Incentive (PLI) Schemes. The goal is to make domestic manufacturing competitive on a global scale. Designed with the aim of boosting manufacturing in strategic sectors, reducing import bills, curbing cheaper imports, and enhancing domestic capacity and exports. The Department for Promotion of Industry and Internal Trade (DPIIT) has notified on June 4, 2021, the Guidelines on Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights)[1] worth Rs. 6,238 crore which is to be implemented over FY 2021-22 to FY 2028-29.

With the objective to create a complete component ecosystem in India and make India an integral part of the global supply chains, PLIWG proposes a financial incentive to boost domestic manufacturing and attract large investments in the White Goods Manufacturing value chain and includes removing sectoral disabilities, creating economies of scale, enhancing exports, creating a robust component ecosystem and employment generation.[2]

TARGET SEGMENTS UNDER THE PLI SCHEME FOR WHITE GOODS

  1. Air Conditioners[3]
  • Air conditioners (components- High Value Intermediates or Low- Value Intermediates or sub- assemblies or a combination thereof)
  1. Large investments
  2. Normal Investments
  • High- Value Intermediates (Copper Tubes, Aluminum Foil and Compressors)
  1. Large Investments
  2. Normal Investments
  • Low- Value Intermediates (PCB assembly for controllers, BLDC motors, Service Valves and Cross Flow Fans for AC and other components)
  1. Large investments
  2. Normal investments
  3. LED Lights[4]
  • LED Lighting Products (Core Components like LED Chip Packaging, Resisters, ICs, Fuses and large- scale investments in other components, etc.)
  1. Large investments
  2. Normal investments
  • Components of LED Lighting Products (like LED Chips, LED Drivers, LED Engines, Mechanicals, Packaging, Modules, Wire Wound Inductors, and other components)
  1. Large Investments
  2. Normal Investments

ELIGIBILITY CRITERIA

  1. Companies undertaking brownfield or Greenfield investments for manufacturing in target segments in India will be eligible for the Scheme’s incentive.
  2. Companies’ eligibility will be determined by their ability to meet pre-qualification criteria for certain target segments.
  3. A single entity can only apply for one target section. Separate Group companies, on the other hand, may apply for different target segments.
  4. Eligibility shall be subject to thresholds of cumulative incremental investment and incremental sales (net of taxes) of manufactured goods (as distinct from traded goods) over the base year for the respective year[5]

TENURE OF THE SCHEME

The support provided under the PLI Scheme shall be provided for a period of five years after the base year as defined and one year of gestation period for fructifying investment to be implemented over FY 2021-22  to FY 2028-29.

CONCLUSION

The scheme in play is likely to benefit global and domestic companies, including a number of MSMEs and would further help in achieving growth rates that are much higher than the existing ones for AC and LED industries.

[1] https://dipp.gov.in/sites/default/files/Guidelines-for-the-PLI-Scheme04062021.pdf

[2] https://dipp.gov.in/sites/default/files/PLIWG-Notification-16042021_10May2021.pdf

[3] https://dipp.gov.in/sites/default/files/PLIWG-Notification-16042021_10May2021.pdf

[4] https://dipp.gov.in/sites/default/files/PLIWG-Notification-16042021_10May2021.pdf

[5] https://dipp.gov.in/sites/default/files/Guidelines-for-the-PLI-Scheme04062021.pdf

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