Indian Government Policies Overhauling Outdated Inefficient Lighting Spurs Massive LED Demands

India is the world’s second most populated country, with huge market size and economic growth. The Indian government started to promote carbon emission reduction policies in October 2014, encouraging public to use LED bulbs to replace the current 750 million incandescent bulbs on the market.

The Indian manufacturing industry is not particularly strong, hence most of the LED products on the market are mostly products with lower technical levels. In comparison to the European and North American market that have higher entry levels, Chinese manufacturers products exported to the Indian market can potentially be labelled as high-end products.

However, competition in the Indian market is very intense. International LED manufacturers from U.S., Germany, Japan and South Korea are also contending for market shares.

Currently, more than 300 million people in India live off the electricity grid. Local manufacturers lack core LED technologies, which has made the country highly reliant on LED luminaire imports. Compared to traditional luminaires, LED bulbs still have a much higher price tag.

Most of India’s LED products are applied in outdoor lighting products, but civilian market demands have soared following economic developments, increased power coverage, and stabler power supplies.

In 2012, the Indian LED lighting market value was estimated to value US $100 million, and consisted a very small 3-5% market share of the country’s total general lighting market. In the residential lighting market, most newly constructed complexes used LEDs, while existing CFL users’ willingness to switch to LEDs has been relatively low.

Government projects is the main LED lighting market growth driver in India, and amounts for nearly 51% of orders. On the other hand, LED downlights, industrial lighting and other none residential lighting products have also introduced LED light sources.

Countries promotion of LED lighting has strengthened in 2015, India especially has been striving to make bulbs more widespread.

India’s Prime Minister Narendra Modi is promoting the installation of energy efficient LED lights in commercial buildings, streetlights and average households. Modi has even initiated the LED residential and streetlight replacement project named “Prakesh Path.”

In early 2015, the country’s Press Information Bureau (PIB) announced the Bureau of Energy Efficiency (BEE), an arm of the nation’s Ministry of Power, will be partnering up with Energy Efficiency Services Limited (EESL) to roll out a LED bulb government tender and commercial model roadmap.

More than 302 government agencies have joined the project, and over 186 cities have joined the household lighting and appliance LED lighting upgrade and replacement sector of the project.

In the public lighting market sector, India is preparing to swap all conventional residential lighting and streetlight products to LEDs in more than 100 cities before March 2019. Presently, the country has more than 770 million bulbs, and some 35 million streetlight bulbs.

It is believed government projects will make Indian LED market even more attractive to investors. Catalyzed by cities rapid urbanization and industrialization developments, the LED luminaire market value is estimated to reach US $1 billion by 2020. The LED streetlight market value is projected to reach US $41 million by 2015 to 2020.

Additionally, to reduce its LED industry reliance on imports, the Indian government has issued two large semiconductor subsidies valuing US $2.5 billion, which encompasses De Core Science and Technologies fabs in Gujurat state.

According to market insiders, the majority of LED chips in the country are supplied by Philips and Nichia. Philips market share in the Iocal lighting market reached 65%. Global manufacturers including Cree, Nichia, Samsung and Osram are also leading blue LED chip market developments in the country. Although, Taiwanese LED manufacturers Epistar and Everlight products have emerged in the Indian market, their overall market share remains low.

It is foreseeable that Chinese manufacturers involvement in the Indian market will increase, following the rise of Chinese LED chip manufacturers and technology advancements that are making their products cost/performance (C/P) ratio increasingly evident.

Everlight’s use of Chinese LED chips in its products being sold in the Indian market proves this trend, and they might acquire larger market share in the future.

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