Elcoma says LED price erosion has begun stabilising and replacement demand is improving, though dependence on Chinese components continues to remain high
India’s lighting industry has not yet seen any major disruption from the ongoing West Asia tensions, even as manufacturers continue to depend heavily on other countries, including china for critical LED components like chips and raw materials, industry body Elcoma said, while urging the government to reduce GST on LED products to 5 per cent from 18 per cent.
“We don’t see much impact so far. A little bit of some material, very small, not very significant impact on the cost side which some of the industry players have absorbed and some of them has passed it on to the market, but not very significant so far,” Parag K Bhatnagar, president of the Electric Lamp and Component Manufacturers’ Association of India (Elcoma) said while taking to BW Retail World.
The comments come as industries monitor the impact of geopolitical tensions on shipping costs, crude oil prices and supply chains.
“Consumer demand is robust. I will not say it is like very plump, very high or something like that, but it is very positive. Lighting industry at least is seeing much better growth what had happened previous year in Q1, Q2, Q3” he said on the sideline of Lighting world and Home Tech Expo unveiling which would be held at Bharat Mandapam in January 2027.
Bhatnagar said demand remained steady despite inflationary pressures and broader macroeconomic uncertainty, while years of sharp LED price erosion had started stabilising, improving profitability, along with rising replacement demand.
Government procurement prices for LED bulbs under the Ujala scheme declined from Rs 310 per unit in January 2014 to Rs 38.45 in March 2024, reflecting the rapid adoption of energy-efficient lighting across the country.
LED products now account for more than 60 per cent of India’s lighting market by value, according to industry estimates.
“Rs 100 lamp and now it is Rs 50 lamp can be used for 10 years,” Bhatnagar said, referring to the sharp fall in prices alongside improvements in durability and efficiency.
China Dependence Persists
Even as domestic manufacturing expands, the industry acknowledged that India continues to rely heavily on imports, particularly from China, for LED chips, phosphor and other components.
India imported USD 89.8 billion worth of electronics, telecom and electrical products in 2023-24, according to the Global Trade Research Initiative, with China and Hong Kong together supplying more than half of India’s electronic components, with 2024 imports of electrical and electronic equipment from China alone exceeding USD 47 billion.
Bhatnagar described localisation as a gradual process requiring significant engineering capability, although investments in domestic manufacturing had increased under government-backed schemes such as the Production Linked Incentive (PLI) programme.
Adding that India’s local component ecosystem was still at an early stage and would take time to mature, describing it as a ten-year journey that had only recently begun.
“Most of the branded companies today have their own manufacturing facilities,” he said.
The Elcoma president said India’s local component ecosystem was still at an early stage and would take time to mature. He said the industry wanted faster development of a domestic component ecosystem to reduce import dependence.
“If we can have the entire component ecosystem in India, I think that will be a great contribution from the government to the lighting industry,” he said.
GST Cut Demand
Elcoma also urged the government to lower GST on LED products from 18 per cent to 5 per cent, arguing that LEDs are mass-use, energy-efficient products used across households.
“I think 18 per cent is a very high GST on LED. Could be lesser,” the Elcoma president said.
The industry body said lower taxation would improve affordability and further accelerate LED adoption across urban and rural markets.
Bhatnagar also credited the government’s Ujala scheme for accelerating LED adoption across India, particularly in smaller towns and rural areas. “It would have taken us another 5 years, 10 years, I don’t know, how many years to educate people. So, that government has done,” he said.
Smart Lighting Slow
On smart lighting and automation, industry executives said adoption remained largely concentrated in tier 1 cities and commercial applications, although consumer interest was growing rapidly.
“Automation is more in tier 1, but I feel very quickly with much more faster speed it will move,” the Elcoma president said.
Residential adoption of smart lighting solutions remains relatively small, with the executive estimating the market size at around Rs 500 crore. “Residential adoption as of now is very minimal,” he said.
Amal Sengupt said the convergence of smart lighting and home automation is reshaping the sector. “The integration of lighting with intelligent home systems is redefining how the industry operates,” said Amal Sengupta, Secretary General, Elcoma
Industry executives said future growth would increasingly come from connected devices, AI-enabled automation and integrated energy-saving ecosystems, although ease of use remained a key challenge for consumers.
“Consumers sometimes struggle and they have to learn a lot to manage devices,” the executive said, adding that manufacturers were now working towards creating more intuitive systems for consumers.
