Taking another important step towards the vision of ‘Atmanirbhar Bharat’, the Union Cabinet, approved the Production Linked Incentive (PLI) Scheme for Air Conditioners and LED Lights with incentives worth Rs. 6,238 Crore to be provided over five years for manufacturing of these products in India. PLI scheme objective is to make manufacturing in India globally competitive, by creating economies of scale and ensuring efficiencies.
PLI Scheme shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India for a period of five years to companies engaged in manufacturing of Air Conditioners and LED Lights. Piyush Goyal, Commerce and Industry Ministry said, the demand for air conditioners in India continue to rise, increasing by 15-20% annually. While the government has banned the import of ACs emitting environmental pollutants beyond a certain limit, components have continued to stream in. The move is to curb import flow, and push up the current 25% local value addition done in the manufacturing of air conditioners to upto 75%.
Selection of companies for the scheme shall be done so as to incentivize manufacturing of components or sub-assemblies, not manufactured in India presently with sufficient capacity. Mere assembly of finished goods shall not be incentivized. The scheme will be implemented as pan India scheme. A number of global and domestic companies, including a number of MSMEs will benefit from the Scheme. Scheme is expected to be instrumental in achieving growth rates that are much higher than existing ones for AC industry. They will have to meet the BIS and BEE Quality standards for sales into domestic market and applicable standards for global markets. It will lead to investments in innovation, R&D and upgradation of technology.
