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Chinese LED products seek to brighten India

By Li Wenfang | China Daily | Updated: 2016-12-16 07:45

Twenty lighting product manufacturers in Guangdong plan invest in a light-emitting diode or LED industrial park in India.

The idea is to tap the vast market potential and lower costs in the populous South Asian country.

Led by the Guangdong Solid State Lighting Industry Innovation Center, the group of manufacturers is talking with several states in India for the project.

Two states have already held talks: Gujarat, the home state of Indian Prime Minister Narendra Modi, and Rajasthan, both in western India. The agreement on the project is expected to be signed in the first half of next year.

The proposed project is estimated to generate annual output of $596.88 million, said Gui Shirong, director of the center.

Total investment for the planned park is estimated at $2.98 billion, half of which would come from the participating enterprises. The rest is expected to be in the form of low-interest loans and support via advance purchase orders, Gui said.

The Chinese enterprises involved include those engaged in the manufacture of LED-based displays, road lamps, and household and commercial lighting products, chip packaging, and supporting industries.

As the largest LED-strong Chinese province, Guangdong houses more than 10,000 related companies, or 60 percent of the national total. Its LED output surged from 38 billion yuan ($5.6 billion) in 2009 to 415.6 billion yuan last year, including exports worth 126 billion yuan.

The province had replaced more than 4 million road lamps with LED products by the end of last year, saving energy by 55 percent, a record that can be replicated in other countries, he said.

This is particularly true for India where LED consumption is less than 5 percent of that in China. But things are changing.

Certain brands such as Philips, Osram, Havells, Wipro, Bajaj, Eveready, Syska, Oreva, Moser Baer and Surya are already slugging it out in the Indian LED market.

Yet, LED exports from Guangdong to India grew rapidly to $644 million last year, up 148 percent year-on-year.

According to Research and Markets, India's LED market is forecast to reach $1.4 billion by 2019.

"Government initiatives to replace incandescent bulbs with LED bulbs, increasing energy demand supply gap, declining prices are the factors driving the growth of LED lighting in India. Street lighting application accounts for majority of the market revenues in Indian LED lighting market... LED lighting market will account for 32 percent of the overall India's lighting market revenues by 2019."

According to Frost & Sullivan, a business consulting firm, by 2021, the LED technology is estimated tol penetrate 57 percent of the lighting market in India.

The proposed Chinese LED park in India is expected to help advance LED industrialization, upgrade the LED technology and popularize LED lighting products in the country, and create an industrial cluster in the state where the park would be eventually located.

It is also estimated to create about 10,000 local jobs.

As an emerging market with a big population, India has room for taking the LED manufacturing capacity, said Liu Jisen, vice secretary-general of the Guangdong Institute for International Strategies.

Massive production should help India develop its LED industry and bring down the price to increase affordability. The promotion of energy-saving LED products should help India address its sustainable development issue, Liu said.

Apart from India, the markets in Brazil, Africa, Vietnam, Indonesia and East Europe also have potential for similar LED industrial parks, Gui said.

Building on the massive capacity, the LED industry of Guangdong has also embarked on technological innovation and upgrading, inviting participation by institutions from advanced economies, he said.

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