In a brief half-hour interview before catching a flight to Tokyo, Manish Sharma, Chairman of Panasonic Life Solutions-India and South Asia, and FICCI Electronics Manufacturing & Energy Storage Chair, shared insights on the success of the PLI (production-linked incentive) scheme for air-conditioner components with businessline. The scheme, with a budget of ₹6,238 crore, is set to run from FY21 to FY29, aiming to enhance local production, decrease imports, and elevate the sector to a global level. The third round of the scheme concluded in October 2024, with 21 applicants proposing an investment of ₹3,679 crore in manufacturing AC components such as copper tubes, compressors, heat exchangers, control assemblies, and more. Notably, 43% of the applicants were micro, small, and medium enterprises (MSMEs).
Sharma highlighted that in 2019, only 20% of the materials used in making ACs were sourced from within India. However, this has since increased to 60%, with a target of reaching 80% by 2029. The AC market has doubled from seven million units to 14 million units, significantly reducing reliance on imported compressors, with local capacity rising from one million to nearly eight million units. Sharma discussed how the PLI scheme has positively impacted the ‘make in India’ initiative, emphasizing the encouraging progress seen in the industry.
When asked about the transformation of the AC industry due to the PLI scheme, Sharma elaborated on the sector’s low penetration in 2019, coupled with minimal local value addition, making it a promising growth avenue. He underscored the complexity of AC manufacturing processes, outlining the commitment of industry leaders to incentivize the manufacture of components rather than finished goods. Sharma expressed pride in the accelerated growth and enhanced value addition in the industry, surpassing initial targets.
Regarding the impact on consumers, Sharma noted that while pricing benefits may be marginal, the significant reduction in lead times throughout the supply chain has been a game-changer. Shorter lead times lead to faster service for customers, minimizing market shortages and increasing industry efficiency. Moreover, he discussed how the PLI scheme has contributed to improving energy efficiency in ACs, aligning with global standards and incorporating intelligent, connected features for better performance.
Sharma also shed light on Panasonic’s contributions in the industry, particularly through its Miraie platform focused on comfort, energy efficiency, safety, and well-being. Additionally, he touched upon the industry’s progress in exports, emphasizing the goal of enhancing India’s global competitiveness. While exports have shown steady growth, Sharma highlighted the need to further increase indigenous content and achieve economies of scale to strengthen India’s position in the global market.
In conclusion, Sharma painted a hopeful picture of the industry’s future growth trajectory, underscoring the ongoing efforts to make India a significant player in the global AC sector. Through the PLI scheme, the industry has made remarkable strides towards achieving self-sufficiency, competitiveness, and enhanced value addition, ultimately benefiting both the industry and consumers.
