Governance Structure: Manufacturing White Goods in India
In India, the government has implemented various policies to support the manufacturing and sale of white goods, such as refrigerators, washing machines, and air conditioners. These policies are designed to boost domestic production, increase access to affordable white goods, and reduce the country’s dependence on imports.
The Production-Linked Incentive (PLI) Scheme was launched in 2020 to promote the domestic manufacturing of white goods and other electronic products. Under this scheme, the government provides financial incentives to companies that increase their production of white goods in India.
Another policy is the Make in India initiative, which aims to encourage companies to manufacture their products in India by offering a range of benefits, including tax breaks and access to land and infrastructure. The government has also set up several manufacturing zones specifically for producing white goods and other electronic products.
In addition, the government has implemented various measures to make white goods more affordable for consumers. These include subsidies for energy-efficient appliances and a program to exchange old, inefficient appliances for new, more energy-efficient ones.
Governmental organizations involved
In India, the production, distribution, and sale of white goods, such as refrigerators, washing machines, and air conditioning units, are regulated by several governmental organizations. The primary organization responsible for this is the Ministry of Consumer Affairs, Food and Public Distribution. This ministry is responsible for ensuring that white goods meet specific standards for quality and safety and for protecting the interests of consumers in the sale and use of these products.
The Bureau of Indian Standards (BIS) is another critical organization regulating white goods in India. This agency is responsible for setting standards for the quality and safety of these products and testing and certifying that they meet these standards.
The Department of Electronics and Information Technology (DEITY) is another governmental organization that plays a role in the white goods industry in India. This department is responsible for promoting the use and development of electronic products, including white goods, in the country. DEITY works to encourage innovation and research in the industry and to support the growth and expansion of white goods manufacturers in India.
Finally, the National Consumer Disputes Redressal Commission (NCDRC) is responsible for resolving disputes related to selling and using white goods in India. This commission hears consumer complaints and works to mediate or resolve disputes between consumers and manufacturers.
Application procedure under the scheme to receive subsidies
To apply for the PLI scheme and receive subsidies for the production of white goods, manufacturers must follow the steps outlined below:
- Review the eligibility criteria: Manufacturers must ensure that they meet the eligibility criteria for the PLI scheme, which includes having a minimum level of annual production and meeting certain technical and financial requirements.
- Apply: Manufacturers must submit an application to the Ministry of Electronics and Information Technology (MeitY) to participate in the PLI scheme. The application should include details about the company, the manufactured products, and the proposed investment in producing white goods.
- Review and approval: MeitY will review the application and determine whether the manufacturer is eligible for the PLI scheme. If the application is approved, MeitY will provide the manufacturer with a Letter of Intent (LoI), which outlines the terms and conditions of the subsidy.
- Sign the agreement: Manufacturers must sign the PLI agreement and submit it to MeitY along with any required documentation.
- Implement the project: Once the agreement is signed, manufacturers can begin implementing the project and producing white goods.
- Claim the subsidy: Manufacturers can claim the subsidy by submitting reports and documentation to MeitY showing the progress and results of the project. The subsidy will be paid out in installments based on achieving certain milestones.
Eligibility criteria
Manufacturers must meet certain criteria to be eligible for the Production-Linked Incentive (PLI) scheme for white goods in India. These criteria may vary depending on the specific details of the PLI scheme, but generally, manufacturers must:
- Be registered in India: Manufacturers must be registered and headquartered in India and have a minimum of 51% Indian ownership.
- Have a minimum annual production level: Manufacturers must have a minimum annual production of white goods, as determined by the Ministry of Electronics and Information Technology (MeitY).
- Meet technical and financial requirements: Manufacturers must have the technical capability and financial resources to produce high-quality white goods. They must also have a track record of producing these products or investing in industry research and development.
- Meet export requirements: Manufacturers must be willing and able to export a certain percentage of their production, as determined by MeitY.
- Meet other requirements: Manufacturers may also meet other requirements, such as having a certain level of domestic value addition or investing in research and development.
It is vital for manufacturers to carefully review the eligibility criteria for the PLI scheme before applying to ensure that they meet all of the requirements. Manufacturers that do not meet the eligibility criteria will not be able to participate in the program and receive subsidies.
Under the PLI scheme, manufacturers can receive subsidies based on their performance in meeting certain milestones or targets. These milestones may include increasing production, achieving certain levels of domestic value addition, and exporting a certain percentage of production. The exact amount of benefits that a manufacturer can receive will depend on the specific terms of the PLI agreement, which will be outlined in the Letter of Intent (LoI) provided by the Ministry of Electronics and Information Technology (MeitY).
Manufacturers can claim the subsidy by submitting reports and documentation to MeitY showing the progress and results of their project. The subsidy will be paid out in installments based on achieving certain milestones.
It is important to note that the PLI scheme is a competitive program, and only a limited number of manufacturers will be selected to participate. The amount of benefits available under the scheme is limited, and manufacturers will be ranked based on their performance and the value of their contribution to the industry. As a result, the number of benefits received by each manufacturer will vary.
42 applicants with committed investments of INR 4,614 crore have been provisionally selected as beneficiaries under the PLI scheme. The selected applicants include 26 for Air Conditioner manufacturing with committed investments of INR 3,898 crore and 16 for LED Lights manufacturing with committed investments of INR 716 crore.
Overall, the PLI scheme for white goods in India is an essential tool for supporting the growth and development of the white goods industry in the country. It helps manufacturers increase production, boost exports, and encourage innovation and competitiveness, ultimately benefiting consumers by providing them with high-quality, affordable products.
Anurag Dhole
Anurag Dhole is a Research Intern at Tatvita. Presently he is pursuing his bachelors in the Liberal Arts department at the Savitribai Phule Pune University.
