Dec 19, 2016: About 20 LED lighting product manufacturers in Guangdong, China, is likely to invest in an LED industrial park in India. This decision has been taken to tap the highly potential, vast, and low cost LED lighting market in this South Asian country.
Indian states to sign pacts
This group of 20 LED manufacturers are being led by the Guangdong Solid State Lighting Industry Innovation Center (GSSLIIC), who is talking with several states in India for the project.
The Chinese enterprises involved in this proposal are mainly the manufacture of LED-based displays, LED streetlights, and residential and commercial LED lighting products, chip packaging, and other related industries.
Indian Prime Minister Narendra Modi’s home state Gujarat and its neighbouring state Rajasthan, both in western India, have already held talks with GSSLIIC. These two states are likely to sign agreements on the project by the first half of 2017.
According to Research and Markets, India’s LED market is estimated to reach $1.4 billion by 2019. Frost & Sullivan, a research firm, estimates that by 2021, the LED technology will penetrate 57% of the lighting market in India.
As reported by a Chinese daily, Gui Shirong, director of GSSLIIC, said, the LED manufacturers are keen to tap this potential LED market. The proposed project with Indian states is estimated to generate an annual revenue of $596.88 million.
The total investment for the planned LED industrial park is estimated to be $2.98 billion, half of which would come from the the Chinese LED manufacturers participating in the project. The rest of the amount is expected to come in the form of low-interest loans and support via advance purchase orders.
Chinese province Guangdong has the largest number of LED enterprises—more than 10,000 LED companies—which is 60% of the national total. Guangdong’s LED output increased from 38 billion yuan ($5.6 billion) in 2009 to 415.6 billion yuan in 2016, including exports worth 126 billion yuan.
Will the project be successful?
Guangdong itself had replaced more than 4 million of its streetlights with LED lights by 2016, which saved its energy by 55%. GSSLIIC has proposed the Indian states to replicate this record, as India’s LED consumption is less than 5% of that in China.
Despite many domestic LED brands like Philips, Osram, Havells, Wipro, Bajaj, Eveready, Syska, Moser Baer, Surya, etc, who are already slugging it out in the Indian LED market, LED exports from Guangdong to India increased by 148% to $644 million in 2016, year-on-year.
As an emerging market in the global LED industry, India has room for taking in the Chinese LED manufacturing companies as well, said Liu Jisen, vice secretary-general of the Guangdong Institute for International Strategies.
The proposed Chinese LED park in India is expected to create about 10,000 local jobs. It will not only popularize LED lighting products in India, but also help advance LED industrialization, upgrade LED technology, and create an industrial cluster in the state where the park would be located.
Apart from India, this group of Chinese LED companies is also eyeing markets in Vietnam, Indonesia, Brazil, Africa, and East Europe, which have potential for similar LED industrial parks, Gui said.