Govt  okays  PLI  for AC, LED makers

Manufacturers of air-conditioners, LED lights and solar photovoltaic (PV) modules can now pitch for ₹10,738 crore worth of production-linked incentives (PLIs), designed to raise local manufacturing and reduce imports from countries like China.

The PLI schemes, approved by the Union cabinet chaired by Prime Minister Narendra Modi, comprise incentives worth ₹6,238 crore towards white goods, and ₹4,500 crore for solar modules.

The PLI schemes were first announced last year with an aim to create global manufacturing champions in India by removing sectoral bottlenecks and creating economies of scale to develop complete ecosystems for components. This February, the government invited global firms to take advantage of the ₹1.97 trillion worth of PLI schemes for 13 sectors and expand their manufacturing in India.

In white goods, firms that make either components or sub-assemblies in India will be offered sops. Those who simply carry out assembly of finished goods will not qualify, according to a government note.

“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 brown field or green field Investments. Thresholds of cumulative incremental investment and incremental sales of manufactured goods over the base year would have to be met for claiming incentives,” according to the statement.

The PLI scheme for white goods is expected to lead to ₹1.7 trillion in incremental production and exports worth ₹64,400 crore while creating more than 500,000 jobs over five years.

It is also expected to generate government revenues of ₹11,300 crore and ₹38,000 crore through direct tax and goods and services tax during the period. The scheme for white goods will extend an incentive of 4-6% on incremental sales over the base year (2019-20) for goods made in India and covered under target segments to eligible companies.

Manish Sharma, president and chief executive officer, Panasonic India, said the announcement on PLI scheme for ACs is “encouraging” and expects it to lead to developments in component design capability.

“As component manufacturing is a key beneficiary of the new policy, indigenous AC manufacturing will get a fillip. This will also enable design-led manufacturing, fuel innovation and drive component exports along with finished ACs from India,” Sharma said.

The PLI scheme for solar PV modules is expected to add 10,000 megawatts (MW) of integrated solar PV manufacturing capacity, and bring direct investments of about ₹17,200 crore and create 30,000 direct jobs. Livemint

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