In a major development, South Korean conglomerate LG Electronics has announced its plans to set up a new manufacturing facility in Sri City, Andhra Pradesh, with a massive investment of Rs 5,000 crore. This investment marks a significant step in strengthening India's manufacturing capabilities, especially in the South. The stone-laying ceremony for this new facility is scheduled for May 8, 2025, and is expected to have a far-reaching impact on both the local economy and India's manufacturing sector as a whole.

The New Manufacturing Facility at Sri City

The facility will span 247 acres in Sri City and will be primarily focused on producing key household appliances, including refrigerators, air conditioners, and washing machines. Additionally, components such as compressors, motor compressors, and heat exchangers will be manufactured in the facility. LG Electronics has targeted December 2026 to start production, marking the beginning of a new era for manufacturing in the region.

The move is a part of LG's broader strategy to expand its footprint in India, leveraging the country's growing market demand for home appliances. This facility is set to be the largest manufacturing investment in South India in recent years, with 1,495 direct jobs expected to be created. Moreover, the ripple effect of this investment will result in approximately 10,000 indirect jobs, benefiting the local economy substantially.

State Government's Support and Incentives

The Andhra Pradesh government has played a crucial role in facilitating this project by providing various incentives under its manufacturing policy. These incentives are designed to attract large investments into the state and to boost the local economy. Some of the major incentives include:

• 100% subsidy on water consumption for 20 years

• SGST refund on construction work

• 100% exemption from electricity duty for 20 years

• 50% subsidy on electricity tariff for 20 years

• Rs 6,000 per month per worker for skilling subsidies for five years

Additionally, the state government has waived off stamp duty and registration fees to make the process smoother. To ensure the fast-tracking of the project, a single desk clearance system has been put in place, with a senior officer assigned to assist LG Electronics in fulfilling all its requirements.

Suppliers’ Investment in Sri City

In another key development, four suppliers of LG Electronics have also decided to make their way into India for the first time. These suppliers will invest a combined total of Rs 839 crore in Sri City, further boosting the region’s status as a key hub for manufacturing in India. This not only strengthens LG Electronics’ position but also helps establish a strong supply chain in the area.

Job Creation and Local Economic Impact

The establishment of the new facility is expected to create substantial employment opportunities, with direct jobs in manufacturing and indirect jobs across various sectors such as logistics, retail, and local services. The 1,495 direct jobs will provide significant employment to skilled workers, while the 10,000 indirect jobs will support the local economy in ways that go beyond just production.

Moreover, the influx of suppliers investing in Sri City will help strengthen the local economy, contributing to the region's overall growth. This will also result in the creation of training and development centers for workers, as the Andhra Pradesh government is committed to enhancing the skill set of the workforce in line with modern manufacturing requirements.

The Strategic Importance of Sri City

Sri City is fast becoming one of India’s prominent industrial hubs, attracting investments from various global and domestic companies. The region benefits from its strategic location, offering easy access to key markets in both India and abroad. It is situated just 55 kilometers from Chennai, a major port city, which facilitates easier access to export markets.

With well-developed infrastructure and a strong industrial base, Sri City is quickly emerging as a competitive destination for large-scale manufacturing investments in India. The decision by LG Electronics to set up its facility here is a significant vote of confidence in the region’s potential.

The Road Ahead: Long-Term Benefits for Andhra Pradesh

The investment by LG Electronics is expected to have long-term benefits not only for Sri City but also for the entire state of Andhra Pradesh. With the facility set to become operational in December 2026, it will serve as a model for future industrial projects in the region. The state government's support and the incentives offered to LG and its suppliers highlight the potential for further foreign investments in the area.

Furthermore, the manufacturing facility will help diversify the economy of Andhra Pradesh, reducing its dependency on other sectors and providing a solid foundation for sustainable industrial growth. As India continues to grow as a manufacturing powerhouse, such investments will play a critical role in boosting the country’s overall economic prospects.

Conclusion

LG Electronics’ new manufacturing facility in Sri City is more than just a corporate investment; it is a symbol of India’s growing appeal as a manufacturing hub. With Rs 5,000 crore in investments, significant job creation, and robust government support, the project is expected to have a transformative impact on the local economy. As the facility takes shape over the coming years, it will contribute to India’s manufacturing strength and provide high-quality appliances to meet the demands of both domestic and international markets.

The government's role in providing critical incentives, the collaboration with LG's suppliers, and the creation of new jobs will set a precedent for other companies looking to invest in India. As production begins in 2026, the facility will be a major step in India’s journey towards becoming a global manufacturing leader.

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