Production Linked Incentive Scheme for white goods – application window reopened

The Indian Government had approved a Production Linked Incentive (PLI) scheme for White Goods (PLIWG Scheme) on 07 April 2021, as part of the ambitious ‘Atmanirbhar Bharat’ initiative. PLIWG Scheme has been designed to create a holistic component ecosystem for Air Conditioners (ACs) and LED lights industry and make India an integral part of the global supply chain. The operating period of PLIWG Scheme is FY 2021-22 to FY 2028-29 with a budget outlay of USD 760.73 mn (INR 62.38 bn).

On 08 July 2024, the Government has reopened the PLIWG Scheme based on the appetite of the industry to invest more under the PLIWG Scheme, which is an outcome of the growing market and confidence generated due to manufacturing of key components of ACs and LED lights in India under the PLIWG Scheme. The application window will be open for 90 days from 15 July 2024 to 12 October 2024. This is the 3^rd time that the application window is being reopened, after the first two rounds of applications being completed in 2021 and 2022.

The PLIWG Scheme has received great response from both domestic and multinational companies, that have committed to develop a robust component ecosystem in India. Under this scheme, 64 applicants with committed investment of USD 825.12 mn (INR 67.66 bn) have been approved as beneficiaries. Out of this, 30% of the total committed investments are from 13 foreign owned companies (Daikin, Panasonic, Mitsubishi, Hitachi, Nidec, LG and MetTube etc.). For this 3^rd round of applications, leading manufacturers such as Tata-owned Voltas, Daikin, Blue Star and Dixon Technologies are evaluating to submit fresh applications. All these companies are existing beneficiaries of the PLIWG Scheme.

Though there has been no change in the budget outlay of the scheme, following conditions and timelines are prescribed by the government:

1. Both new applicants and existing beneficiaries of the PLIWG Scheme who propose to invest more by way of switching to higher target segments or through their group companies under different target segment would be eligible to apply, subject to the eligibility conditions and guidelines of the original scheme.
2. New applicants in the 3^rd round will be eligible for the PLIWG Scheme only for a maximum period of 3 years.
3. For existing beneficiaries who had opted for investment period up to March 2023, would be eligible for PLIWG Scheme for 3 years, whereas existing beneficiaries who had opted for investment period up to March 2022 would be eligible for 2 years only.
4. A quarterly claim processing system is introduced in place of the existing system of processing claims on an annual basis. This has been done to maintain liquidity, better working capital management and enhance operational efficiency for the scheme beneficiaries.

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