White Goods PLI Scheme Draws ₹4,121 Cr Investment, MSMEs Lead the Way

The third round of the Production Linked Incentive (PLI) Scheme for White Goods concluded with 38 applicants committing ₹4,121 crore in investments. Designed to boost domestic manufacturing of air conditioners (ACs) and LED lights, the scheme saw 43% participation from MSMEs, reflecting its role in empowering smaller enterprises and fostering self-reliance across the value chain.

Key Highlights of Third Round of the PLI Scheme

The latest round of the PLI Scheme showcases key strengths across investment, regional spread, and strategic partnerships:

• MSME Participation: 43% of applicants were MSMEs, demonstrating growing confidence in India’s manufacturing sector.
• Robust Investment: Total investments reached ₹4,121 crore, signaling the scheme's appeal for both domestic and international firms.
• Geographic Spread: Investments span 13 states and 49 new locations, promoting regional development and economic decentralization.
• High-Value Components: Focus on the production of compressors, copper tubes, and LED drivers strengthens India’s capability to meet domestic demand and reduce import dependence.
• Strategic Partnerships: Participation from suppliers to brands like Daikin, Voltas, LG Electronics, and Surya bolsters the domestic supply chain through enhanced collaboration.

Investment Trends and Key Clusters

The third round attracted a mix of existing and new applicants, reinforcing the scheme’s momentum. Eight existing beneficiaries pledged ₹1,285 crore in additional investments, while 30 new applicants committed ₹2,836 crore, expanding manufacturing capacity.

Emerging manufacturing clusters are forming in key industrial hubs, including:

• Noida-Greater Noida (Uttar Pradesh)
• Neemrana and Bhiwadi (Rajasthan)
• Sanand (Gujarat)
• Aurangabad-Pune (Maharashtra)
• Sri City (Andhra Pradesh) – branded as the “Cooling City”, home to 6 AC manufacturers and 12 component makers.

Additionally, five foreign companies pledged ₹245 crore, joining 15 international firms already investing ₹2,287 croreto manufacture advanced components, further integrating India into global value chains.

Sectoral Investment Breakdown

The investments under the PLI Scheme are focused on two critical segments:

• AC Components: ₹3,679 crore from 21 applicants, targeting high-value intermediates like compressors, copper tubes, and aluminum foil stock, which together account for nearly 50% of the bill of materials for room ACs.
• LED Components: ₹442 crore from 18 applicants, concentrating on LED drivers, chips, and heat sinks, addressing gaps in domestic manufacturing capacity.

Industry Networks and Vendor Collaboration

Several participants are suppliers to leading manufacturers across both segments. In the AC sector, brands like Daikin, Voltas, LG, and Blue Star source components from these applicants. Similarly, Surya, Orient, Crompton Greaves, and Signify collaborate with suppliers in the LED segment.

The Department for Promotion of Industry and Internal Trade (DPIIT) has actively facilitated vendor collaborations, conducting meetings at Sri City, holding consultations with ambassadors abroad, and organizing weekly interactions with PLI beneficiaries in partnership with IFCI Ltd. These efforts have strengthened industry networks and accelerated participation.

What is the PLI Scheme?

The PLI Scheme was launched by the Department for Promotion of Industry and Internal Trade (DPIIT) in 2021 to boost domestic manufacturing, reduce import dependency, and create a robust component ecosystem. Approved by the Union Cabinet with an outlay of ₹6,238 crore, the scheme incentivizes production in air conditioners and LED lightsthrough FY 2028-29. Companies earn incentives based on their production output, aligning with India’s goal of becoming self-sufficient in key components and integrating more deeply into global supply chains.

To date, 66 companies have committed ₹6,962 crore under the scheme, with leading participants including Daikin, Voltas, Panasonic, Blue Star, Dixon, Hindalco, and Crompton Greaves.

Impact and Future Outlook

The PLI Scheme for White Goods is projected to have a far-reaching impact on India’s economy, with key outcomes expected to include:

• ₹11,083 crore in total investments
• ₹1.81 lakh crore in production value
• 80,486 direct jobs created across 54 districts in 18 states

Domestic value addition is forecast to increase from 15-20% to 75-80%, solidifying India’s presence in global supply chains. The completion of the third round ensures that selected companies will be eligible for incentives over three years, encouraging sustained investments.

With a focus on manufacturing growth, import substitution, and employment generation, the PLI Scheme for White Goods is poised to transform India into a global hub for AC and LED components, positioning the country as a competitive player in the international market.