Reasons to Invest

PLI Scheme with an outlay of INR 6,238 crores ($851 mn) for white goods (Air Conditioners and LED Lights)
Demand growth is likely to accelerate with rising disposable incomes and easy access to credit.
Huge untapped market with substantially lower penetration of consumer appliances compared to other countries

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100% FDI is allowed under the Automatic Route

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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%.

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.

Production Linked Incentives Scheme (PLI Scheme)

A PLI scheme with outlays worth INR 6,238 crores has been implemented in the White Goods sector for the production of Air Conditioners and LED lights. The scheme will promote domestic manufacturing, generation of jobs, and increased exports. 

Trade Scenario

India's imports for air conditioners, refrigerators, and washing machines amounted to $1.86 bn
India imports primarily come from China, Thailand, and Vietnam in the sector
India's exports for air conditioners, refrigerators, and washing machines amounted to $439 mn
India’s biggest export destinations in white goods are United Arab Emirates, Sri Lanka, and the United States

Major Investors

Product Profiles

High-income growth and rising demand for split ACs are the key growth drivers. Installed stock of room ACs in India increased from two million units in 2006 to 30 million units in 2017 and is expected to be between 55- 124 million by 2030.
As of April 2019, the AC makers expect a double-digit rise in sales and also expect adoption of superior technology and power efficient range of inverter air conditioners (ACs) by consumers.
During FY18(up to February 2018) production of air conditioners in India increased 4.9 per cent year-on-year to 3.19 million units. Split ACs had a 85 per cent market share in FY18. Overall room air conditioners market in the country is expected to increase to 7 million units by FY21 from 5.5 million units in FY18

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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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