LG Electronics has officially commenced construction on a $600 million manufacturing plant in Sri City, Andhra Pradesh, marking its third production facility in India. The groundbreaking ceremony, held on May 8, 2025, was attended by key figures including LG Electronics Home Appliance & Air Solution Company President Lyu Jae-cheol and local government officials. This new plant aims to bolster LG's presence in the rapidly growing Indian market, especially amidst rising global trade tensions.
The new facility will occupy a sprawling area of 1 million square meters (approximately 10.7 million square feet), with a dedicated floor space of 220,000 square meters. Once operational, it is projected to produce an impressive 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners, and 2 million compressors annually. LG plans to initiate air conditioner production by the end of 2026, gradually introducing washing machine, refrigerator, and compressor lines through 2029.
LG's investment underscores its commitment to reinforcing its status as a "national brand" in India, a strategy that has been in motion since the company established its Indian subsidiary in 1997. According to research firm Redseer Strategy Consultants, LG led the Indian market in the first half of last year, capturing significant market shares across various categories: 28.7 percent in refrigerators, 33.5 percent in washing machines, 19.4 percent in air conditioners, and 25.8 percent in televisions.
“Washing machines and air conditioners have a penetration rate of only about 30 percent and 10 percent, respectively, in the Indian market,” an LG official stated. “With fast economic growth, demand for premium appliances is increasing, and our existing factories alone may not be enough to meet that demand.” This sentiment was echoed by LG Electronics CEO Cho Joo-wan, who highlighted the company's recognition of India’s immense potential and its commitment to fostering growth through ongoing investments in manufacturing, innovation, and talent development.
The Sri City plant is strategically located near Chennai, providing logistical advantages for exports and easier access to southern India compared to LG’s existing facilities in Noida and Pune. Products manufactured at this new site are expected to be distributed throughout India and exported to neighboring countries, including Bangladesh and Sri Lanka.
However, challenges loom on the horizon. Recent reports indicate that LG has filed a lawsuit against the Indian government over new regulations that have significantly increased electronic waste recycling costs. Implemented in September 2024, these rules introduced minimum price standards for waste processing, raising compliance costs for manufacturers by three to six times. These financial pressures could complicate LG's operations in India, especially as the company navigates a labor landscape that has seen recent unrest.
Last September, workers at a Samsung Electronics plant in Tamil Nadu engaged in a month-long strike, demanding better working conditions and recognition of their union. Such labor challenges could pose risks for LG as it ramps up production in the region. Analysts suggest that effective labor management will be crucial for LG as it establishes its new facility.
In addition to its manufacturing ambitions, LG has also submitted a draft prospectus for an initial public offering (IPO) of its Indian operations to the Securities and Exchange Board of India. Initially planned for May, the IPO has been delayed until the second or third quarter of fiscal year 2026 due to market volatility. During an earnings call on April 24, 2025, the company emphasized that it would not rush the listing, opting to carefully assess market conditions and potential synergies.
The new plant is expected to generate approximately 1,495 direct jobs and indirectly create around 10,000 employment opportunities in the region. This investment is also anticipated to attract ancillary businesses, fostering a supportive ecosystem for white goods manufacturing in Andhra Pradesh.
Shri Nara Lokesh, the Hon’ble Minister for Information Technology, Electronics and Communications in Andhra Pradesh, expressed enthusiasm for LG's investment, stating, “We are delighted that LG Electronics has chosen Sri City for its third manufacturing facility in India. This is a testament to LG Electronics’ commitment to India, and I am confident that this expansion will address the growing demand for LG products.”
Furthermore, the project is recognized as the largest single-stage electronics investment in South India, highlighting India's rising importance within LG Electronics' global supply chain network. The government of Andhra Pradesh has allocated 247 acres of land for the new manufacturing unit, which is expected to become operational by the end of 2026.
As LG Electronics embarks on this significant venture, the company is poised to not only enhance its manufacturing capabilities but also contribute to the economic growth of India, reinforcing its position as a key player in the global market.
