DPIIT notifies PLI scheme for ACs, LED lights, says assembly of finished goods not to be incentivised

The department for promotion of industry and internal trade (DPIIT) has notified the PLI scheme for ACs and LED lights and said that selection of companies to avail the incentives would be done to support manufacturing of components which are not made in India presently.

It said that mere assembly of finished goods would not be incentivised and companies investing in basic/core components would get a higher priority.

Earlier this month, the government approved a production-linked incentive (PLI) scheme for white goods - Air Conditioners (ACs) and LED Lights - with a budgetary outlay of Rs 6,238 crore. It will be implemented over 2021-22 to 2028-29.

According to the notification of the DPIIT, the Empowered Group of Secretaries chaired by Cabinet Secretary will monitor the PLI scheme, undertake periodic review of the outgo under the scheme, ensure uniformity of all PLIs and take appropriate action to ensure that the expenditure is within the prescribed outlay.

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The group will be empowered to make any changes in the modalities of the scheme within the overall financial outlay of Rs 6,238 crore.

It said that the incentive per beneficiary will be applicable on incremental sales (net of taxes) of manufactured goods (as distinct from traded goods) over the base year (2019-20) subject to ceilings.

"Mere assembly of finished goods shall not be incentivised. Selection of companies for the scheme shall be done so as to incentivise manufacturing of components or sub-assemblies which are not manufactured in India presently with sufficient capacity," it said.

Support under the scheme will be provided to companies/entities engaged in manufacturing of components of ACs (such as copper tubes, aluminium foil and compressors) and LED lights (like LED chip packaging, resisters, ICs, and fuses).

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Enlisting the eligibility criteria to avail the benefits under the PLI scheme, the notification said incentives would be provided to companies making brown-field (existing facility) or green-field (new) investments for the manufacturing.

"One entity may apply for one target segment only. However, separate group companies may apply for different target segments. Further, sales by entities to their group companies should be at an arm's length price as those to outside group companies," it added.

The scheme proposes a financial incentive to boost domestic manufacturing and attract large investments in the white goods manufacturing value chain.