White Goods PLI Scheme: 38 Companies, Including Voltas and Blue Star, Apply in Third Round

White Goods PLI Scheme: 38 Companies, Including Voltas and Blue Star, Apply in Third Round

Sub : Eco

Sec: External sector

• Overview:
  • A total of 38 companies have applied under the Production-Linked Incentive (PLI) scheme for white goods, focusing on air-conditioners (ACs) and LED lights.
  • Major companies like Daikin, Voltas, and Blue Star are among the applicants, with a proposed investment of ₹4,121 crore.
• Scheme Reopened:
  • The government reopened the application window for the ₹6,238-crore PLI scheme in July 2024 to accommodate more players due to increased interest from companies.
  • This is the third round of applications for the scheme, indicating the growing demand and participation in the initiative.
• Investment Breakdown:
  • 21 companies have applied for the manufacture of AC components, committing to an investment of ₹3,679 crore.
  • 18 applicants have committed to manufacturing components for LED lights, with an investment of ₹442 crore.
  • The investments aim to boost local production, reduce imports, and enhance the competitiveness of the Indian manufacturing sector.
• Impact on the Sector:
  • Department for Promotion of Industry and Internal Trade (DPIIT), stated that the PLI scheme is significantly benefitting the white goods sector.
  • The value addition in the sector has improved from 25% to about 50%, showing the positive impact of the scheme on domestic manufacturing.
• Expected Outcomes:
  • Over the next three years, the 38 companies are projected to achieve a production value of around ₹55,877 crore for AC components and LED lights.
  • The initiative is expected to generate direct employment for 47,851 individuals, contributing to economic growth and job creation.
• Purpose of the PLI Scheme:
  • The PLI scheme for white goods aims to promote local manufacturing by offering financial incentives based on incremental production.
  • It encourages investment in domestic production of ACs and LED components, aiming to reduce dependency on imports and strengthen the ‘Make in India’ initiative.

This initiative is part of India’s broader strategy to boost local manufacturing, reduce import dependence, and promote self-reliance in critical sectors.

Production Linked Incentive (PLI) Scheme

• Introduction:
  • The Production Linked Incentive (PLI) Scheme is an initiative by the Government of India aimed at promoting domestic manufacturing and reducing dependency on imports.
  • It provides financial incentives to companies on their incremental sales of products manufactured in India, thus encouraging them to set up or expand production facilities.
• Objectives:
  • Boost Manufacturing: The scheme aims to enhance domestic production capacity across various key sectors.
  • Reduce Imports: By encouraging local manufacturing, the scheme seeks to reduce dependency on imports, thereby improving the trade balance.
  • Employment Generation: Increased production capacity is expected to create more job opportunities, benefiting the Indian economy.
  • Economic Growth: Enhanced manufacturing output can contribute to overall economic growth, with an estimated impact over the next five years.
• Incentive Structure:
  • Companies are rewarded based on their performance and the incremental sales of domestically manufactured goods.
  • The scheme is sector-specific, with each sector having its own set of eligibility criteria and incentive structures.

Important: The schemes are being implemented in various stages by the respective Ministries/ Departments.