Panasonic India Chairman Manish Sharma has called for a dedicated Production-Linked Incentive (PLI) scheme focused on high-value air conditioner components, such as compressors and motors. As the government strengthens its support for electronics manufacturing with a ₹22,919 crore PLI for non-semiconductor components, Sharma emphasized that a tailored scheme for the AC industry could further catalyze local value addition and reduce dependency on imports. Backed by industry associations like CEAMA and FICCI, his comments underline the necessity of sector-specific incentives to push India’s global competitiveness in electronics and white goods manufacturing.
The Need for a Component-Specific PLI in AC Manufacturing
India’s air conditioner (AC) industry has matured rapidly, and domestic demand has been effectively aggregated. This presents a unique opportunity to deepen local value chains and reduce import reliance—particularly on core components like compressors and motors, which continue to be primarily sourced from abroad.
Manish Sharma, Chairman of Panasonic Life Solutions India and head of FICCI’s Electronics & White Goods Manufacturing Committee, firmly advocated for a separate PLI to address this gap. Sharma noted that despite the success of the existing ₹6,238 crore PLI for white goods (notified in April 2021), there remains untapped potential for deeper domestic integration in the AC segment.
“A targeted incentive focused on high-value components is the need of the hour,” Sharma stated, noting that most other key components are already being manufactured locally by four major players. The inclusion of such incentives, he argued, would help local manufacturers become globally competitive faster and sustainably.
Boost from Existing PLI Schemes and Government Initiatives
The broader PLI scheme for white goods has already yielded encouraging results. A January 2024 update from the government cited 84 participating companies committing investments worth ₹10,478 crore, expected to generate production worth ₹1.72 lakh crore over the course of the scheme, running until 2028-29.
Meanwhile, the recently launched ₹22,919 crore PLI for passive electronic components marks India’s first focused push towards developing non-semiconductor electronics like heat sinks, capacitors, resistors, and printed circuit boards (PCBs). Sharma believes this move will bolster India’s position as a competitive manufacturing hub, particularly if PCB manufacturing is scaled locally to reduce the current annual import bill of ₹5,000–6,000 crore.
“If we import PCBs that are already populated with components, we lose out on the opportunity to create jobs and value here,” Sharma said, stressing the importance of building upstream manufacturing capabilities.
Panasonic’s Position and Industry Outlook
Panasonic India is optimistic about FY25, projecting revenue of ₹11,500 crore and profits nearing ₹1,000 crore. The company expects double-digit growth, driven by robust performance in air conditioning, electrical devices, and B2B solutions such as smart factory technology.
With ACs accounting for a significant share of this momentum, Sharma reiterated that a time-bound PLI benefit—designed as a transitional support—would help the industry achieve economies of scale and become globally viable.
He further emphasized that while semiconductor production remains a more complex and capital-intensive sector, India's focus on components like compressors, motors, and PCBs can generate near-term results and create a ripple effect across allied industries.
Conclusion
India’s ambition to become a global electronics manufacturing hub hinges on its ability to incentivize the production of high-value components within its borders. Panasonic India’s call for a dedicated PLI in the AC segment underscores the importance of nuanced, sector-specific policy interventions. With rising domestic demand, an improving investment climate, and early success under broader PLI schemes, the time is ripe to accelerate India's journey toward self-reliance in electronics and white goods manufacturing.
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