Reasons to Invest

    Upgrading Production Ecosystem: Manufactering push provided through schemes such as PLI Scheme in White Goods, SPECS (Scheme for Promotion of Manufactering of Electronics Components and Semiconductors), EMC 2.0 (Electronic Manufactering Cluster Scheme 2.0), etc.
    Surging Demand: White Goods and Consumer Electornics market is expected to exhibit a strong growth of between 10-15% CAGR over the next 5 years
    Attractive State Incentives: Multiple states have announced special incentives for consumer durable manufacterers, with incentives offered on capital expenditure, interest payments, land purchase etc. Special customized incentives also available for large and mega-investors across different states.

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    Budget 2021-2022 Announcements

    Tariff rate on all goods falling under sub-heading 8414 40 (Air compressors mounted on a wheeled chassis for towing) and 8414 80 (Others) is being increased to 15% (from 7.5%) while the effective BCD on all goods under these sub-headings, except for tariff item 8414 80 11 (Gas compressors of a kind used in air-conditioning equipment), is being retained at 7.5%. BCD on compressors of Refrigerators falling under tariff item 8414 30 00 (Compressors of a kind used in refrigerating equipment) and compressors of Air Conditioners falling under tariff item 8414 80 11 (Gas compressors of a kind used in air-conditioning equipment), is being increased from 12.5% to 15% by increasing the tariff rate. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force with immediate effect. Tariff rate on all goods falling under sub-heading 8501 10 (Electric Motors & Generators; Motors of an output not exceeding 37.5 W: DC motor) to 8501 53 (Electric Motors & Generators; Of an output exceeding 75 kW) is being increased from 10% to 15% while the effective BCD on all goods under these sub-headings (8501 10 to 8501 53), is being retained at 10%. Consequently, goods falling under sub-headings 8501 10 to 8501 53 will attract the effective BCD rate of 10%.

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    Government Support

    Central Government Schemes
    • Production Linked Incentive scheme
    • Duty Drawback Scheme
    • Export Promotion Capital Goods scheme
    State Incentives

    Incentives by the state usually include:

    • Capital subsidy
    • Stamp duty exemption
    • Interest subsidy
    • Tax reimbursement
    • Electrical duty exemption  
    Empowered Group of Secretaries (EGos) and Project Development Cells (PDCs)

    The PDCs would be responsible for coming up with projects with all approvals and identifying issues to attract investment that would be brought to the attention of the EGoS.

    Productive Linked Incentive Scheme for White Goods

    The PLI Scheme for White Goods is aimed to boost domestic manufacturing of components and sub-assemblies of ACs and LED Lights and make India globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies. The Scheme was approved by the Government of India in April 2021 and has an outlay of $855 Mn. Tenure for the scheme is FY 2021-22 to FY 2028-29.

    Application for 2nd Round closed on 25th April 2022.

    Achievements:

    • 64 applicants with committed investments of INR 6,766 Cr have been selected as beneficiaries under the scheme.
    • The selected applicants include 34 for the manufacturing of Air-conditioner’ components with a committed investment of INR 5,275 Cr and 30 for the manufacturing of components of LED Lights with a committed investment of INR 1,491 Cr.

    To explore more, click here.

    UJALA Scheme

    Under the UJALA (Unnat Jyoti by Affordable LEDs and Appliance for All) Scheme, the Government distributed more than 366 Mn LEDs to households from year 2015 to 2022 at 40% of the market price. The Scheme aimed to promote energy-efficient lighting. As of January 2022, 48 Bn kWh per annum energy has been saved and 3.86 Bn Tonnes of reduction in CO2 emission has been achieved.

    SLNP Scheme

    The Street Lighting National Programme (SLNP) aims to install/retrofit around 30 Mn LED streetlights by 2024 out of which 11 Mn LED streetlights have been installed as of January 2022, resulting in annual energy saving of around 7.6 Bn KWh and annual estimated greenhouse gas emission reduction of around 5.29 Mn Tonnes of carbon dioxide.

    Trade Scenario

    India's Consumer Durables Imports (HS codes 8415,8418,8422,8450,8516,8539) decreased by 1% CAGR from $ 3.1 Bn to $ 2.9 Bn from in FY 2018 to 2022.
    India's Consumer Durables Exports increased by 5% CAGR from $ 760 Mn to $ 915 Mn from FY 2018 to FY2022.
    AC imports (HS code 8415) declined by about 10% CAGR from $ 1.2 Bn to $ 792 Mn in period 2018 to 2022. AC Exports increased from $ 165 Mn to $ 233 Mn, rising by 9% CAGR in the same period.
    Major markets for import include China, Thailand, Singapore Vietnam, Turkey, amongst others. Major export markets include UAE, Bangladesh, Nepal, Nigeria etc.
    Indian exports are expected to rise further, as local manufactering ramps up and the Production-linked Incentive Scheme incentivises production of key components domestically for ACs and LEDs
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    Value Chain Assessment

    Product Profiles

    Indian residential AC market is estimated to be around 7 to 7.5 mn units per annum by volume. The organized sector dominates the industry in terms of sales value and volume, employment generation and investments.
    In 2020, urban households constituted 70% share of the demand for ACs from the residential sector. Adoption of latest technologies has led to the introduction of new innovative models in the market such as ACs fitted with copper condenser and blue fin, ubiquitous sensor and Wi-Fi enabled smart features.
    Constantly rising temperatures in northern regions of India has made Air Conditioners an increasingly important fixture in homes boosting their sales. Currently, ACs have a penetration of just 4% compared to global average of 30% signifying the huge potential for growth

    Gallery

    Jul 07, 2023Workshop on Production Linked Incentive (PLI) Schemes
    Workshop on Production Linked Incentive (PLI) Schemes
    Jul 07, 2023Workshop on Production Linked Incentive (PLI…Workshop on Production Linked Incentive (PLI) Schemes
    New India's Trade Performance
    Apr 13, 2023New India's Trade Performance by Piyush Goya…New India's Trade Performance by Piyush Goyal, Commerce & Industry Minister
    Business Summit
    Feb 20, 2023PM Modi at the Economic Times Global Busines…PM Modi at the Economic Times Global Business Summit 2023

    Latest News

    Aug 23, 2023

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    Jul 13, 2022

    Electrolux re-enters Indian consumer durables market

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    Resources

    Team Articles

    PLI scheme
    Aug 10, 2021
    Inside India's Production Linked Incentive Schemes: White Goods

    Since its launch last year, the 'AatmaNirbhar Bharat'…

    By:
    Jul 01, 2021
    Setting up Display FAB in India

    India is gearing up for a $ 400 Bn electronics market by…

    By:
    Jun 21, 2021
    India’s LED Sector: Enhancing the Local Ecosystem

    Light bulbs are one of the most ubiquitous electric…

    By:
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    FAQ

    FAQs

    What are White goods?

    White goods are major household appliances and may include air conditioner, dishwasher, clothes dryer, drying cabinet, freezer, refrigerator, kitchen stove, water heater, washing machine, , microwave ovens and induction cookers.

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    Who can be an Applicant under the Production Linked Incentive Scheme for White Goods (PLI-WG Scheme)?

    Any company incorporated in India and as defined in the Companies Act 2013, proposing to manufacture one or more eligible product(s) under the specified target segment.

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    Whether an applicant can apply for more than one Target Segments and Eligible Products?

    One entity may apply for any one category under one target segment only. However, separate Group companies may apply for different target segments.

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    Whether a beneficiary under other PLI Scheme of Government of India can avail benefits for the same products under the PLI-WG scheme?

    No. Such applicants shall not be eligible under the PLI-WG scheme. However, the applicant can continue to avail incentives under other Central/ State schemes.

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    What are the investment categories under each target segment?

    An applicant can apply under any one of the following investment categories for anyone target segment:

    1. Large Investment
    2. Normal Investment

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