Govt targets domestic value addition in ACs to rise to 75-80% by FY29

Domestic value addition to rise further in ACs

The government is aiming to get domestic value addition in air conditioners to increase to 80 per cent by 2028-29 from the current 50 per cent.

India produces 8 million compressors and 11 million air conditioners each year.

“We did not have any production of AC compressors in the country prior to the Production-Linked Incentive scheme’s introduction,” said Sanjiv, Joint Secretary, Department of Promotion of Industry and Internal Trade.

“Our domestic value add has increased from 25 to 50 per cent. We are targeting 75-80 per cent value add by 2028-29,” Sanjiv further added.

The joint secretary announced the successful close of the application window of the third round of the PLI scheme in white goods, aimed at ACs and LEDs.

The third round of the scheme has received a commitment worth Rs 4,121 crore.

The scheme has had two previous rounds, which attracted investment worth Rs 3,259 crore and generated sales of Rs 14,911 crore.

The government announced the scheme in 2021, with an outlay of Rs 6,238 crore. As per the latest data, it is expected to have an outgo of Rs 5,656 crore.

“This is the Hero Honda moment for ACs in India,” Sanjiv noted.

The government is targeting a total investment of Rs 11,083 crore and generating 80,486 direct employment, with total production of nearly Rs 2 lakh crore.

The ministry is planning manufacturing clusters in five cities across the country, at Noida-Greater Noida in UP, Neemrana and Bhiwari in Rajasthan, Aurangabad-Pune in Maharashtra, Sanad, Gujarat and Sri City in Andhra Pradesh.

The latest round has eight existing and 30 new beneficiaries, and 43 percent belong to the MSME sector.