Synopsis–Commerce and industry minister Piyush Goyal held a detailed consultation with the industry on Tuesday on how to make India a global production hub for these two products.
KOLKATA: The proposed Rs 6,238-crore production-linked incentive scheme for air-conditioners and LED lighting will focus on component production as it seeks to increase exports of these two products to at least 35-40% of production from negligible levels now, four senior industry executives said.
The scheme, set to be launched next month, will seek to increase domestic value addition of these two products to about 75% from the current 20-25% for air-conditioners and around 40% for LED lighting products and attract investment from large global component players, they said.
Of the PLI outlay, around Rs 5,100 crore is earmarked for AC manufacturing and balance is for LED lighting, the executives said.
Commerce and industry minister Piyush Goyal held a detailed consultation with the industry on Tuesday on how to make India a global production hub for these two products.
The minister on Tuesday night tweeted about the consultations with representatives of AC and LED lighting manufacturers to foster “make in India, make for the world”.
“Deliberated ways to boost exports by making Indian industry globally competitive,” he tweeted.
Kamal Nandi, business head at Godrej Appliances and president of electronics industry body Consumer Electronics and Appliances Manufacturers Association, said the focus of the meeting was to develop component ecosystem, scaling up manufacturing activities, becoming more competitive due to scale, and increasing exports.
Panasonic India CEO Manish Sharma said the emphasis of the PLI scheme as discussed in the meeting will be to build component ecosystem. For AC, the focus is on improving domestic value addition from 25% to 75% in five years, and so is it to boost for LED lighting, he said.
Senior executive of a leading company, who was present in the meeting, said the current domestic value addition for LED lighting is 40% and expected to go to 75% with implementation of recommendations of PLI. “The current export is a few million dollars and the government expects it to go to $8 billion,” he said.
Similarly, the AC industry does not export anything significant right now. With the PLI scheme, CEAMA expects 35% of total production of Rs 1 lakh crore will be exported in next ten years. At present, the domestic AC industry is Rs 16,000 crore.
When the cabinet approved the PLI schemes last November, it had said white goods have high potential of domestic value addition and making them globally competitive. “A PLI scheme for the sector will lead to more domestic manufacturing, generation of jobs and increased exports,” it said.
The government is also considering separate investment threshold for micro, small and medium scale component makers to build an MSME ecosystem for component manufacturing of AC and lighting.
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