A separate production-linked incentive (PLI) for the air conditioner segment, focusing on high-value components like compressors and motors, is the need of the hour, Panasonic India head Manish Sharma said, echoing the demand of the industry. On the government's recent PLI scheme for passive or non-semiconductor electronics components, Sharma, the Chairman of Panasonic Life Solutions India, said it will encourage the industry and boost its competitiveness in the global markets.
On March 28, the government approved a production-linked incentive scheme for passive or non-semiconductor electronics components with an outlay of Rs 22,919 crore. It is the first scheme that focuses on promoting the manufacturing of passive electronic components.
Currently, India imports USD 12-13 billion worth of non-mobile electronics. Almost USD 5-6 billion of PCB (printed circuit board) are being imported from elsewhere for assembling here, he said.
"Now, the industry is being encouraged. We should start to populate those aggregated components... the heat sinks, the passive components, the capacitors, the resistors, etc," Sharma told PTI on the sidelines of the launch of the company's first smart home experience centre.
According to Sharma, if India has to "genuinely" embark on a journey to manufacture components in the country, it needs to produce more PCB boards in the country only.
"Then we will be able to aggregate the demand for components. If these are coming in from elsewhere, populated elsewhere, then it would be very difficult for us to do local manufacturing and make it viable," Sharma, who also chairs industry body FICCI's committee on 'Electronics & White Goods Manufacturing', said.
However, he acknowledged that semiconductor is still a big game.
Earlier this year, industry body CEAMA had asked for another round of PLI for air conditioners, which will help the industry to have domestic value addition beyond 70 per cent.
Asked about it, Sharma said, "I very strongly support it. That is the need of the hour."
"The air conditioner industry, in particular, has demonstrated... (it) has aggregated the demand. That's why such a catalysing effect could happen and at a fast speed," he added.
The original intention was to expedite the process. What was to happen in the next six-year time frame, it happened in the next three and a half years, he added.
"And therefore we expect that... more encouragement should come in," Sharma said.
The government has notified PLI for white goods (air conditioners and LED lights) in April 2021. The Union Cabinet had given approval to a PLI scheme for air conditioners and LED lights to be implemented during 2021-22 to 2028-29 with an outlay of Rs 6,238 crore.
A release from the government in January had 84 companies under the PLI Scheme for White Goods (ACs and LED Lights) set to bring investments of Rs 10,478 crore, resulting in production worth Rs 1,72,663 crore during the scheme period.
"PLI is a transitional benefit for three to four years till the time industry creates that economies of scale to be able to stand and be competitive on a global scale themselves. So that's why I am a supporter of such incentives," said Sharma.
Almost all projects under PLI for AC & LED Lights hit the ground.
"Now, four large companies are manufacturing compressors, motors in abundance, I think only heat exchangers, the aluminium and copper would be a challenge to deal with, and I am sure that it will also happen soon," he said.
Panasonic India expects its final revenue for FY25 to be around Rs 11,500 crore, along with profits close to Rs 1,000 crore.
It expects a double-digit growth in the current fiscal year, led by strong performance of air conditioners, electrical devices, and B2B verticals as smart factory solutions.
On March 28, the government approved a production-linked incentive scheme for passive or non-semiconductor electronics components with an outlay of Rs 22,919 crore. It is the first scheme that focuses on promoting the manufacturing of passive electronic components.
Currently, India imports USD 12-13 billion worth of non-mobile electronics. Almost USD 5-6 billion of PCB (printed circuit board) are being imported from elsewhere for assembling here, he said.
"Now, the industry is being encouraged. We should start to populate those aggregated components... the heat sinks, the passive components, the capacitors, the resistors, etc," Sharma told PTI on the sidelines of the launch of the company's first smart home experience centre.
According to Sharma, if India has to "genuinely" embark on a journey to manufacture components in the country, it needs to produce more PCB boards in the country only.
"Then we will be able to aggregate the demand for components. If these are coming in from elsewhere, populated elsewhere, then it would be very difficult for us to do local manufacturing and make it viable," Sharma, who also chairs industry body FICCI's committee on 'Electronics & White Goods Manufacturing', said.
However, he acknowledged that semiconductor is still a big game.
Earlier this year, industry body CEAMA had asked for another round of PLI for air conditioners, which will help the industry to have domestic value addition beyond 70 per cent.
Asked about it, Sharma said, "I very strongly support it. That is the need of the hour."
"The air conditioner industry, in particular, has demonstrated... (it) has aggregated the demand. That's why such a catalysing effect could happen and at a fast speed," he added.
The original intention was to expedite the process. What was to happen in the next six-year time frame, it happened in the next three and a half years, he added.
"And therefore we expect that... more encouragement should come in," Sharma said.
The government has notified PLI for white goods (air conditioners and LED lights) in April 2021. The Union Cabinet had given approval to a PLI scheme for air conditioners and LED lights to be implemented during 2021-22 to 2028-29 with an outlay of Rs 6,238 crore.
A release from the government in January had 84 companies under the PLI Scheme for White Goods (ACs and LED Lights) set to bring investments of Rs 10,478 crore, resulting in production worth Rs 1,72,663 crore during the scheme period.
"PLI is a transitional benefit for three to four years till the time industry creates that economies of scale to be able to stand and be competitive on a global scale themselves. So that's why I am a supporter of such incentives," said Sharma.
Almost all projects under PLI for AC & LED Lights hit the ground.
"Now, four large companies are manufacturing compressors, motors in abundance, I think only heat exchangers, the aluminium and copper would be a challenge to deal with, and I am sure that it will also happen soon," he said.
Panasonic India expects its final revenue for FY25 to be around Rs 11,500 crore, along with profits close to Rs 1,000 crore.
It expects a double-digit growth in the current fiscal year, led by strong performance of air conditioners, electrical devices, and B2B verticals as smart factory solutions.
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