The white goods industry in India is experiencing noteworthy attention from the government as it pushes for increased participation under its Production Linked Incentive (PLI) scheme. Recently, the government reopened the application window for manufacturers of air conditioners (ACs) and LED lights, encouraging them to apply for fiscal benefits meant to bolster domestic production and innovation.
The call for action primarily stems from the muted response the scheme has garnered since its initial rollout. According to Rajeev Singh Thakur, Additional Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), this response has raised concerns, prompting the department to again extend the application window. 'Somehow the response has been muted...So I request the industry to have a look and probably this time, you can continue applying,' he remarked during the recent CII Consumer Electronics and Durables Summit. The application filing period will be open from July 15 to October 12.
The PLI scheme, initially approved by the Union Cabinet on April 7, 2021, aims to encourage the manufacturing of components and sub-assemblies for ACs and LED lights, with the entire initiative set over a seven-year period ending in 2028-29. With an outlay of approximately ₹6,238 crore, the government hopes to incentivize local manufacturing capabilities and reduce import dependencies.
So far, the PLI initiative has seen moderate uptake, with 66 applicants pledging investments totaling ₹6,962 crore. This level of investment, albeit significant, is seen as insufficient when considering the vast potential of the white goods sector. The government is optimizing investments as part of its broader commitment to the ‘Make in India’ initiative, aimed at heightening domestic manufacturing.
Highlighting the current economic climate, Thakur emphasized the government’s efforts to streamline processes and remove barriers to increase investments. Enhancements include reductions of compliance burdens and the approval of 12 new industrial townships, intended to draw investments and bolster manufacturing capabilities across the country.
DPIIT Secretary Amardeep Singh Bhatia also joined the conversation, emphasizing the need for collaboration between companies. 'The industry should not only target the domestic market but also become part of global value chains,' he noted. This strategy reflects the government’s aspiration for India to be integrated more deeply within international markets, thereby reinforcing its competitive stature and economic resilience.
Bhatia underscored the positive transformations occurring within India’s manufacturing sector, such as the reduction of logistics costs and the availability of skilled labor, positioning the nation favorably within the global supply chain. 'We have the demographic dividend, and it’s time for the industry to capitalize on it,' he said, highlighting the urgency to address the investment shortfalls.
While the government's initiatives show promise, industry stakeholders are urged to engage more proactively. Bhatia called for increased expenditures on research and development, stressing the imperative of innovation and development within the domestic sector. Currently, the spending on R&D is considered 'abysmally low,' which is seen as detrimental to long-term competitiveness.
The Indian white goods market, projected to reach the world's fourth-largest consumer durables segment by 2027, is poised for considerable growth owing to rising domestic demand and government facilitation. Yet, tapping this potential hinges on the active participation of stakeholders submitting applications for the PLI scheme.
Through the reopening of this application process, the government is sending out signals of support for the industry, inviting them to leverage fiscal incentives. This call to action reflects broader objectives to refine supply chains and to encourage players within the industry to take full advantage of incentives becoming available.
Looking forward, experts within the industry remain optimistic but cautious about the future of the PLI scheme and its capacity to drive substantial transformation. How effectively the industry can respond to these government-led efforts will largely determine the success of these initiatives.
For manufacturers contemplating participation, the moving deadline serves as both encouragement and reminder of the government’s commitment to support growth within the white goods sector. With increased attention and participation, this industry might just emerge stronger than ever, reinforcing India’s capabilities as a manufacturing hub and contributing positively to its economy.
