PLI scheme for air conditioners fails to excite local manufacturers

Lack of incentive for incremental assembly may delay investments

The newly introduced production-linked incentive (PLI) scheme for air conditioners (ACs) may have long-term potential to boost the local component ecosystem. But the scheme has failed to impress local manufacturers who assemble finished units.

Since last April, the Cabinet, headed by Prime Minister Narendra Modi, has approved PLI for five other sectors. But unlike the previous ones, the latest scheme focuses solely on growing component manufacturing. The manufacturers will receive 4-6 per cent incentive on incremental production, only if they add value by growing component production.

“The selection of companies for the scheme shall be done, so as to incentivise manufacturing of