Govt sets a cool exports target for AC makers
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Kolkata: The government has asked air-conditioner manufacturers to push exports on a much larger scale because the boost to the industry via the production linked incentive (PLI) scheme for white goods such as AC and LED lights has not reflected in shipments to foreign shores.Minister of commerce and industry Piyush Goyal discussed this in a meeting with senior industry executives earlier this month, people aware of the development said.The government is of the view that the category has huge potential to grow India's electronics export value after smartphones.It wants India to export 15-16 million units in the next four years and compete with China and Thailand which have emerged as big export hubs, industry executives said. At present, India exports around 2 million units. In contrast, China exported 85 million units of ACs in 2024, worth $26 billion, while Thailand exported 19 million units and generated over $7 billion in revenue, as per Chinese AC industry body and media reports.As per commerce ministry data, India exported ACs worth ₹3,683 crore ($435 million) in 2024-25, which grew 32% year-on-year (yoy). In contrast, India's smartphone exports in 2024-25 rose 55% yoy to $24.1 billion.Companies who have applied for AC PLI include LG Electronics Voltas , Daikin, Blue Star , Amber, Johnson Hitachi, Panasonic , Haier, Midea and Havells The industry has been asked to prepare a list of support initiatives it might require to start exports other than the existing PLI scheme."The government wants manufacturers, especially PLI beneficiaries, to export ACs which has not started in a big way as it was difficult to compete with the Chinese in pricing and scale," said Pradeep Bakshi, managing director at Voltas, the Tata-owned AC manufacturer. "But there is a renewed push from the government who wants to know from the manufacturers the disabilities in exports," he said.The government has also asked the industry to prepare a report on the disabilities in AC exports to be submitted in June."We have been discussing the project with the government," said Jasbir Singh, chief executive officer of Amber Enterprises , India's largest AC contract manufacturer."After China, Thailand too has become a big exporter of ACs in the last five years," said Singh.When the government announced the PLI scheme for white goods in 2021, it had estimated AC and LED light exports worth ₹64,400 crore by 2026. While some companies are exporting LED lights, exports of ACs are still relatively small with companies like Blue Star, Daikin, Havells and Voltas exporting in small quantities, some to the US.India Cellular and Electronics Association (ICEA) chairman Pankaj Mohindroo said after mobile phones, AC is a category with huge exports potential. "And like mobile phones, PLI has a significant impact on the evolution of the local manufacturing ecosystem," he said.ICEA is setting up an AC export task force with the Refrigeration and Air-conditioning Manufacturers Association to draw a roadmap and monitor its execution.
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