The government is expected to start disbursement of fiscal incentives under PLI for white goods in the last quarter of this financial year as certain selected beneficiary firms have started production, DPIIT Secretary Rajesh Kumar Singh said on Tuesday. The production linked incentive (PLI) scheme on white goods seeks to encourage domestic manufacturing of air conditioners and LED light components.
"In the last quarter (January-March), we are expecting some disbursements," Singh told reporters on the sidelines of the India Korea Business Partnership Forum meeting here.
Of the 64 selected beneficiaries of the PLI scheme, 15 have started production. These 15 beneficiaries had opted for a gestation period of up to March 31, 2022. Rest of the beneficiaries who opted for gestation period of up to March 31, 2023 are at different stages of implementation.
Singh also said that in PLI sectors like auto and white goods, gestation period is longer and companies have to cross the investment threshold to qualify for the incentives, which takes time.
This is the design of the scheme and investments and production have to be front-loaded and then benefits are provided, the secretary in Department for Promotion of Industry and Internal Trade (DPIIT) said.
Till March, Rs 2,900 crore worth incentives have been disbursed under the Rs 1.98 lakh crore PLI scheme.
Approval of the Rs 1,000 crore additional incentives for this year has been granted for companies engaged in electronics manufacturing.
The secretary said that some of the sectors in the PLI scheme like electronics, mobile manufacturing, pharma and food processing are doing well while in some sectors like textiles, certain correction is needed.
On semiconductor manufacturing, he said the government is encouraging the private sector to come forward and take advantage of opportunities in the semiconductor sector in India.
India has put in place a comprehensive fiscal support for semiconductor segment. With the approval of the programme for development of semiconductors and display manufacturing ecosystem in India with an outlay of Rs 76,000 crore, the government has announced incentives for every part of the supply chain including electronic components, sub-assemblies, and finished goods.
In the current geopolitical scenario, trusted sources of semiconductors and displays hold strategic importance and are key to the security of critical information infrastructure.
Development of the semiconductor and display ecosystem will have a multiplier effect across different sectors of the economy with deeper integration in the global value chain.
In semiconductors, "talks are on and we are encouraging private sector partnerships to come forward and take advantage of the opportunities," Singh told reporters here.
Earlier in his address at the meeting, Singh said huge opportunities are there in India for South Korean firms in the USD 10 billion semiconductor manufacturing scheme.
South Korea is the second largest semiconductor manufacturer in the world with 17 per cent share and is a leader in memory chips and displays. Samsung and S K Hynix are the major manufacturers.
On taking the bilateral trade between India and South Korea to USD 50 billion, the secretary said export opportunities are there for domestic sectors like light engineering and pharma.
On the other hand, South Korea has an opportunity to export goods from high-tech sectors like electronics, critical components, and display.
In 2022-23, the bilateral trade stood at USD 27.9 billion as against USD 25.6 billion in 2021-22.
Singh said that there are opportunities for Korean companies in the semi-conductor space in India where over USD 8 billion of USD 10 billion worth incentives remain unsubscribed.
He also urged Korean companies to invest in India's semiconductor and renewable energy sectors to help accelerate digital and green transition.
"We have taken note of the suggestion that the India-Korea Comprehensive Economic Partnership Agreement (CEPA) needs to be upgraded to further strengthen bilateral relationship," he added.
The agreement, a kind of trade pact, was signed in August 2009.
Source Name : Economic Times