LED lights & air-conditioners- Government approves Rs 6,238 crore PLI scheme

With it objective to make India an ‘Atmanirbhar Bharat’, another initiative was approved by the Central Government in the form of Production Linked Incentive (‘PLI’) Scheme for White Goods (Air Conditioner and LED Lights) with a budgetary outlay of 6,238 crore.

Period of implementation –

The scheme will be implemented over the period FY 2021-22 to FY 2028-29.

Primary Objective –

1. Make Indian manufacturing globally competitive by removing sectoral disabilities, creating economies of scale and ensuring efficiencies.

2. Make India an integral part of global supply chains.

3. To attract global investments.

4. Generate large scale employment opportunities.

5. Enhance exports substantially.

Targeted segments under the scheme –

1. Air conditioner –

• Air Conditioners – includes components – High value Intermediates or Low Value Intermediates or sub-assemblies or a combination thereof)
• High Value Intermediates (copper tubes, aluminum foil and compressors)
• Low Value Intermediates (PCB assembly for controllers, BLDC motors, service valves and cross flow fans for AC and other components)

2. LED Lights –

• LED Lighting Products (Core Components like LED Chip Packaging, Resisters, ICs, Fuses and large-scale investments in other components etc.)
• Components of LED Lighting Products (like LED Chips, LED Drivers, LED Engines, Mechanicals, Packaging, Modules, Wire Wound Inductors and other components)

Incentive quantum –

Incentive of 4% – 6% on incremental sales (net of taxes) over base year for a 5 year period subsequent to base year with 1 year of gestation period.

Actual disbursement of PLI for a particular year will be in subsequent year.

Eligibility for the scheme –

1. 1 company can apply for only 1 target segment. Group companies can apply for different target segments.

2. To be eligible for incentive, the applicant has to fulfill both criteria’s –

• Cumulative incremental investment in plant and machinery.
• Incremental sales over the base year in that respective year.

1^st year of investment is FY 2021-22 and 1^st year of incremental sale is FY 2022-23.

The target segment wise eligibility threshold criteria is provided below:

3. Entity availing benefits under any other PLI scheme of Govt of India will not be eligible under this scheme for the same products.

Base year for the scheme –

FY 2019-20 will be the base year.

Scheme tenure –

1. Support provided for a period of 5 years subsequent to base year 2019-20 with 1-year gestation period.

2. Applications under the scheme open for a period of 6 months initially.

3. For applications received post initial application period, applicants will only be eligible for incentives for the remainder of the scheme of tenure.

Beneficiary selection criteria –

1. Basic / core components investing companies to be prioritized.

2. Large investment in the target segment to be prioritized over normal segment.

3. Mere assembly of finished goods will not be covered under the scheme.