LG Electronics has secured a 15-year incentive package worth 7.06 billion rupees (about US$76.3 million) from the Maharashtra state government, effectively offsetting the full cost of expanding its Pune manufacturing facility and lowering fixed costs at one of its key overseas production hubs.
The incentive package, approved earlier this month and disclosed by LG Electronics India on Monday, covers investments made between November 2017 and October 2024 to expand the Pune plant, a core manufacturing base for the company in India.
The deal strengthens LG’s cost base in India at a time when the company is tightening its focus on operational efficiency and margin discipline across global operations.
The incentives will be applied over 15 years through 2040 and include refunds on state goods and services tax for locally sold products, electricity subsidies, waivers on property and stamp duties, and partial reimbursement of employer contributions to India’s Employee Provident Fund.
The agreement strengthens LG’s cost structure in India as the company sharpens its focus on operational efficiency and margin discipline across global operations.
While LG posted record annual revenue of 89.2 trillion won (about US$61.8 billion) last year, profitability came under pressure in the fourth quarter amid softer demand and heightened competition in televisions and display products. In response, the company has identified cost control and localisation as key drivers of its next phase of growth.
By reducing long-term manufacturing and operating costs in India — one of LG’s fastest-growing and most strategic markets — the incentive package enhances resilience against pricing pressure while supporting scalable production.
“This certification provides a strong foundation for LG Electronics’ continued growth in India,” said Atul Khanna, chief accounting officer of LG Electronics India, in the company’s disclosure.
The Pune facility manufactures televisions and air conditioners 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.
LG is further expanding its local footprint with a third factory under construction in Sri City, Andhra Pradesh. Backed by a US$600 million investment, the plant is expected to begin air-conditioner production later this year, with phased expansion into refrigerators, washing machines and air-conditioner compressors through 2029.
