Indian LED lighting market is expected to reach Rs.31,010 crore by 2022
Gautam Seth | Joint Managing Director, HPL Electric & Power
What opportunities do you see in India in the next two years?
The Indian LED lighting market is expected to reach Rs.31,010 crore, growing at a CAGR of 62 per cent between 2016-20. There has been increased focus by the government towards energy conservation and efficiency in the last few years. GoI has expressed increased interest in converting existing street lights into LED and this is expected to increase demand. Towards this end, they have announced the UJALA scheme to replace all inefficient bulbs with energy efficient lamps.
What are your plans for the segment?
HPL has an established presence in the market for CFLs, with increasing focus on manufacturing and supply of LED lamps, and wires and cables. The company is the fifth largest market player and currently has a market share of 5 per cent in the LED category. Going forward, we aim to further strengthen our presence in the market through the positive reforms being undertaken by GoI.
What potential drivers will boost adoption of LED lighting?
India´s LED lighting market is at a very promising stage. Though it has already been growing at a robust pace over the last few years, there are few factors that are expected to boost the market. There is an increased focus by GoI towards energy conservation and efficiency, boosting demand for LED lights. It is more eco-friendly and up to 80 per cent more efficient than traditional lighting such as fluorescent and incandescent lights. Less energy use also reduces the demand from power plants and decreases greenhouse gas emission.
What are the challenges faced while doing business in India?
In India, consumer approach is a challenge. Consumers take time to accept new technology no matter how beneficial it is. In this segment, most users do not switch their entire lighting to LED, but only replace one or two bulbs in their homes. As such, the cost benefits of LED are not appropriately reflected in their electricity bills.
Further, India lacks the core LED lighting manufacturing technology. Micro level technology is quite costly and is limited to certain countries and companies. Hence, production cost is always high because, apart from which diodes and for other key components are exported.
What opportunities do you sense through the shift towards LED due to policy adoptions?
GoI has announced policies such as the modified special incentive package scheme to encourage and subsidise investment in indigenous value addition. Also, BEE and EESL, working with electricity distribution companies, have developed a business model to sell subsidised LED lights to households at Rs.10 against the market retail price of approximately `400. All existing government schemes to distribute CFL lamps are being modified for distribution of LED lamps. GoI has been making efforts to adopt LEDs for street lighting in key cities and also for architectural lighting applications for national monuments. MNRE and BEE have also been driving initiatives such as distribution of solar LED lanterns in villages for municipalities and local bodies to promote energy-efficient lighting. All these measures are likely to boost the market in India, and as a leading player in the industry for LED lights, we view this as a great opportunity for us for business growth.
Retrofitting for street lights is gaining momentum these days. What is your take on this?
The increasing popularity of LED lighting is encouraging the adoption of new, more energy-efficient LEDs. The retrofitting project involves some cost but just like investing in LED lighting for one´s home, there is a long-term cost-savings to be realised. The upgrade to LEDs will help save energy costs, conserve electricity each year and help reduce the national power load. We view this as India´s journey toward energy efficiency.