To provide the thrust to MAKE IN INDIA CAMPAIGN, white goods maker have come up with large investments. Manufacturer of refrigerators, washing machine and air conditioners will provide further thrust. Investments in excess of 6500cr have been lined up for the next two years.

The GOI’s Make in India Initiative is meant to encourage investments in manufacturing and generate more jobs. To boost the manufacturing, the government had recently levied import duty on white goods and several components. The centre doubled customs duties on refrigerators, washing machines and air conditioners to 20% to curb non-essential items while also increasing duties on compressors for air conditioners and refrigerators from 7.5% to 10%.

The government had also increased import duties on television and smartphones in December last year to 20%, this led to a flurry of investments from TV and smartphones makers.

Germany’s Bosch, and Siemens, Turkey’s Arcelik, China’s Midea, Haier and TCL Co, Japan’s Panasonic and domestic brands such as Godrej and BPL are planning to invest in manufacturing and backward integration into parts.

Shanghai Hitachi Electrical Appliances Co is expanding its compressor units in Gujrat, while Guangdong Meizhi Compressor Co. is setting up a new plant to manufacture the devices in cooling units. Haier has finalised plans to invest 3,000 cr in its new plant in Noida, thrice what it did for its existing plant in Pune.

TCL Corp will start manufacturing appliances and its components from at its upcoming 2,000 cr plant in Tirupati where it will also produce Television. BSH is planning to invest 800 cr for setting up a refrigerator factory near Chennai after having recently started making washing machine. Midea Group announced 1350cr for manufacturing, of which half will be for compressors.

Apart from the import duty hike, brands importing even from countries with which India has signed free trade agreement have realised that local manufacturing is cheaper due to lower labour cost and not having to pay higher freight cost from overseas. The 30,000 cr appliances industry typically makes entry to mid-level while premium products are still imported that need to be addressed. In air-conditioner, over 50% of components are imported and this industry is flourishing at the rate of 7-8%.

Research Assistant
Raj Kumar

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