The third round of applications for the Production Linked Incentive (PLI) Scheme for White Goods, covering air conditioners (ACs) and LED lights, closed on October 12, 2024, attracting 38 companies with a committed investment of Rs 4,121 crore. The application window was open for 90 days starting July 15, 2024.
Notably, 43% of the new applicants come from the MSME sector, reflecting growing confidence among smaller enterprises to join the AC and LED manufacturing value chain. The PLI scheme is overseen by the Department for Promotion of Industry and Internal Trade (DPIIT).
Of the applicants, eight are existing beneficiaries of the PLI scheme, contributing Rs 1,285 crore in additional investment. The 30 new applicants have committed Rs 2,836 crore to manufacture critical components for ACs and LED lights across India, with projects proposed in 13 states and 49 new locations, including Jammu & Kashmir and Odisha.
Altogether, these investments span 54 districts and 174 sites, with key manufacturing hubs emerging in Noida-Greater Noida (UP), Neemrana and Bhiwadi (Rajasthan), Aurangabad-Pune (Maharashtra), Sanand (Gujarat), and Sri City (Andhra Pradesh), known as “Cooling City” for its focus on AC components.
The scheme has attracted a mix of domestic and multinational companies, with five new foreign companies investing Rs 245 crore and 15 existing companies committing Rs 2,287 crore. The total anticipated investment in the AC and LED component manufacturing ecosystem is expected to reach Rs 11,083 crore, creating approximately 80,486 direct jobs.
The scheme is projected to lead to the production of AC and LED components worth Rs 1,81,975 crore. In terms of sector-specific investments, 21 applicants aim to manufacture AC components with a committed investment of Rs 3,679 crore, while 18 applicants plan to produce LED components with an investment of Rs 442 crore.
AC investments are primarily focused on high-value intermediates such as copper tubes, aluminum stock for heat exchangers, and compressors, which constitute nearly 50% of the bill of materials for room air conditioners.
Other proposed products include control assemblies, heat exchangers, motors, sheet metal components, and plastic-molded goods. For LED lights, key components like LED chip packaging, drivers, heat sinks, and light management systems will be produced in India, filling current gaps in domestic manufacturing capacity.
Many applicants are established suppliers to major manufacturers such as Daikin, Voltas, Blue Star, LG (for ACs), and Surya, Orient, Crompton Greaves, and Signify (for LED lights). The high industry response is attributed to factors such as ongoing engagement with vendors, regular meetings with PLI beneficiaries, and support from India’s foreign ambassadors.
The third application window was reopened due to strong industry interest, driven by the growing market for AC and LED components and confidence in the PLI scheme’s success in building domestic manufacturing capabilities. The application window followed the same terms and conditions as outlined in the PLI scheme notification from April 2021.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the PLI Scheme for White Goods on April 7, 2021, with an allocation of Rs 6,238 crore to be implemented from FY 2021-22 to FY 2028-29. The scheme aims to develop a comprehensive component manufacturing ecosystem for ACs and LED lights in India, with domestic value addition expected to rise from 15-20% to 75-80%.
So far, 66 applicants with a total investment of Rs 6,962 crore have been selected as PLI beneficiaries, with prominent companies like Daikin, Voltas, Dixon, Hindalco, Amber, and Blue Star investing in AC and LED component manufacturing. These investments will significantly expand the production of AC and LED components, strengthening India’s position in the global supply chain and promoting self-reliance in these industries.
