The Maharashtra state government has offered LG Electronics a 15-year incentive package worth 7.06 billion rupees, or about US$76.3 million. This effectively covers the entire cost of expanding its Pune manufacturing facility and lowering fixed costs at one of its most important overseas production hubs.
LG Electronics India disclosed the incentive package on Monday, which covers investments made between November 2017 and October 2024 to expand the Pune plant, the company’s core manufacturing base in India. The incentives will be applied over 15 years through 2040 and include partial reimbursement of employer contributions to India’s Employee Provident Fund, electricity subsidies, refunds on state goods and services tax for locally sold products, and waivers on property and stamp duties. As the company intensifies its focus on operational efficiency and margin discipline throughout its global operations, the agreement strengthens LG’s cost structure in India. Despite LG’s record-breaking annual revenue of 89.2 trillion won, or about US$61.8 billion, profitability suffered in the fourth quarter due to decreased demand and increased competition in the television and display product markets. As a response, the business has decided that its next growth phase will be driven primarily by cost control and localization. The incentive package improves LG’s resistance to pricing pressure and supports scalable production by lowering long-term manufacturing and operating costs in India, one of LG’s fastest-growing and most strategic markets. According to Atul Khanna, chief accounting officer of LG Electronics India, in the disclosure made by the business, “This certification provides a strong foundation for LG Electronics’ continued growth in India.” Televisions and air conditioners are manufactured at the Pune facility for the Indian market and selected export destinations. LG also operates a plant in Noida, near New Delhi, producing refrigerators and washing machines.
Together, these two plants anchor LG’s India operations, supported by local research and development as well as a nationwide network of more than 700 brand shops and 900 service centres.
