Eight companies file applications for PLI Scheme for AC components

Nineteen companies have filed applications in the second round for incentives for production-linked incentive scheme for white goods. They have committed investment worth Rs 1,548 crore, which will lead to an incremental production of Rs 26,880 crore over the next five years for air conditioners (ACs) and LED lights. LG Electronics, Mitsubishi Electric, Adani Copper Tubes, Jindal Polyfilms, Crompton Greaves, Wipro, Zeco Aircon and Starion India are among the companies that have applied in the second round. This includes eight companies for AC components.

The government had reopened the applications for the scheme in March.

In November, 42 companies, including Daikin Airconditioning India, Amber Enterprises India Ltd, PG Technoplast, , Blue Star Climatech, Havells India, Johnson Controls Hitachi Air Conditioning India Ltd, Voltas, IFB Industries, Dixon Devices, Panasonic India, and Haier Appliances (India) Ltd. were selected under the PLI scheme for AC components. They had committed investments worth Rs 5,858 crore, as compared to the total budget of Rs 6,238 crore.

The second round of applications was invited as the entire allocated funds were not utilised. LG has proposed to make investments worth Rs 300 crore for compressors. Adani Copper Tubes and Zeco Aircon have proposed to make investments worth Rs 408 crore and Rs 100 crore, respectively, for compressors and heat exchangers. Wipro has proposed to make investments worth Rs 12 crore.

Over the next five years, these 19 companies are expected to achieve production of about Rs 26,880 crore of components of ACs and LED lights and generate direct employment for 5,522 persons. Altogether, the scheme is expected to bring Rs 7,074 crore of investments in the component manufacturing ecosystem of ACs and LED lights industry and generate around 200,000 direct and indirect employment opportunities. It is expected to lead to total production of components of ACs and LEDs in India of about Rs 1.07 trillion.

Applications have been filed for production of components that are not manufactured in India presently in sufficient quantities. The investments in air conditioners will lead to manufacturing components across the complete value chain including components which are not manufactured in India with sufficient quantity. At present, there is insignificant manufacturing of certain high value components of ACs like compressors, copper tubing and aluminium stock for foils. Many other components like control assemblies for indoor units (IDU) or outdoor units (ODU), display units, brushless direct current motors, valves etc. are not manufactured in enough quantity. All these components will now be manufactured in India in significant quantities.

The PLI Scheme on white goods is designed to create a complete component ecosystem for ACs and LED lights in India and make the country an integral part of the global supply chains. The scheme extends an incentive of 6 per cent to 4 per cent on reducing basis on incremental sales for a period of five years subsequent to the base year and one year of gestation period. The government estimates that domestic value addition is expected to grow from the current 15-20 per cent to 75-80 per cent.

The PLI scheme was first notified on April 16, 2021, and its guidelines were published on June 4. Interested investors had time up to September 15 last year to apply for the scheme. The application window was opened from March 10 to April 25 this year. “No application shall be accepted after the closure of the application window,” the Department for the Promotion of Industry and Internal Trade had said.

Investments Committed
Commitments by 26 companies selected under air conditioner PLI scheme

How PLI Scheme Works
Minimum incremental investment and sales required to avail PLI

First round of applications closed, status
The first application window for the PLI Scheme for White Goods was open from June 15, 2021 to September 15, 2021. A total of 52 companies filed their applications and out of them, 42 applicants with committed investment of INR 46.14 billion were provisionally selected as beneficiaries. This includes 26 applicants for Air Conditioner manufacturing with committed investments of INR 38.98 billion and 16 applicants for LED Lights manufacturing with committed investments of INR 7.16 billion. Additionally, six applicants proposing FDI from countries sharing land border with India have been advised to submit approval for FDI.

TVJ Bureau