Cabinet approves Production Linked Incentive Scheme for white goods with budgetary outlay of Rs 6,238 crore
Air-conditionersZhu Wei/Unsplash

Cabinet approves Production Linked Incentive Scheme for white goods with budgetary outlay of Rs 6,238 crore

New Delhi, April 7, 2021

The Union Cabinet today approved a Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights) with a budgetary outlay of Rs 6,238 crore.

An official press release said this was another important step towards the vision of "Atmanirbhar Bharat" (Self-reliant India).

The main objective of the PLI scheme is to make manufacturing in India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies. It is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains. The scheme is expected to attract global investments, generate large scale employment opportunities and enhance exports substantially, the release said.

The PLI Scheme for White Goods would extend an incentive of 4% to 6% on incremental sales of goods manufactured in India for five years to companies engaged in manufacturing Air Conditioners and LED Lights. Different segments have been earmarked for different types of components separately to specifically target global investments into desired areas. The selection of companies for the scheme will seek to incentivize the manufacturing of components or sub-assemblies which are not at present manufactured in India with sufficient capacity. Mere assembly of finished goods will not get incentives.

Companies meeting the pre-qualification criteria for different target segments will be eligible to participate in the scheme. Incentives will be open to companies making brownfield or greenfield Investments. Thresholds of cumulative incremental investment and incremental sales of manufactured goods over the base year would have to be met for claiming incentives, the release said.

An entity availing benefits under any other PLI Scheme of the Union Government will not be eligible under this scheme for the same products but the entity may take benefits under other applicable schemes or those of the State governments.

The scheme will be implemented as a pan-India scheme and is not specific to any location, area or segment of the population. Several global and domestic companies, including several MSMEs, are likely to benefit from the scheme, the release said.

"The scheme is expected to be instrumental in achieving growth rates that are much higher than existing ones for AC and LED industries, develop complete component eco-systems in India and create global champions manufacturing in India. They will have to meet the compulsory BIS and BEE Quality standards for sales into the domestic market and applicable standards for global markets. It will also lead to investments in innovation and research and development and upgradation of technology.

"It is estimated that, for five years, the PLI Scheme will lead to an incremental investment of Rs 7,920 crore, incremental production worth Rs 1,68,000 crore, exports worth Rs 64,400 crore, earn direct and indirect revenues of Rs 49,300 crore and create an additional four lakh direct and indirect employment opportunities," the release added.


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