LG Electronics Announces ₹5,000 Crore Investment Plan for Sri City, Andhra Pradesh

South Korean tech giant LG Electronics has announced a significant investment of ₹5,000 crore to establish a large-scale manufacturing facility in Sri City, Andhra Pradesh. The ground-breaking ceremony for the project is scheduled to take place on May 8, 2025. This investment marks one of the largest manufacturing commitments in South India, further strengthening India’s position as a global manufacturing destination.

247-Acre Facility to Produce Home Appliances and Key Components

The new facility will span 247 acres and will be dedicated to manufacturing a wide range of LG’s home appliances, including refrigerators, air conditioners, and washing machines. In addition to finished goods, LG will also produce critical components such as compressors, motor compressors, and heat exchangers at this facility.

This end-to-end production capability reflects LG’s strategy to localize its operations and reduce dependence on imports for both appliances and key parts.

Production Timeline and Employment Generation

According to company officials, production is expected to begin by December 2026. The investment is projected to create 1,495 direct jobs and an estimated 10,000 indirect jobs, giving a massive boost to the employment ecosystem in the region.

This project is the first major investment under the Andhra Pradesh state government’s new manufacturing policy, which aims to attract global companies and generate large-scale employment.

LG Suppliers to Invest ₹839 Crore in India for the First Time

In addition to LG’s direct investment, four of the company’s suppliers are also entering the Indian market for the first time. These suppliers have committed ₹839 crore in investments in Sri City, which will support the local production ecosystem and improve supply chain efficiencies for LG.

This supplier ecosystem will further help reduce costs, improve logistics, and facilitate just-in-time manufacturing.

State Support and Incentives Under the Manufacturing Policy

The Andhra Pradesh government is offering a wide range of incentives to ensure the successful execution of LG’s project. These include:

• 100% exemption from stamp duty and registration charges

• 100% water subsidy for 20 years

• SGST refund on construction work

• 100% exemption from electricity duty for 20 years

• 50% subsidy on electricity tariffs

• A ₹6,000 monthly skilling subsidy per worker for five years

These benefits reflect the state’s commitment to attracting top-tier manufacturers and creating a business-friendly environment.

High-Level Monitoring and Fast-Track Approvals

To ensure timely implementation, a senior-level officer will be appointed to support LG throughout the project’s development. Multiple government departments—including power, water resources, and land allocation—have been instructed to expedite all approvals and clearances.

Additionally, a single-desk clearance system has been implemented to enable swift coordination and avoid bureaucratic delays.

Strategic Importance of the Sri City Project

Sri City, located in Tirupati district, has emerged as a strategic industrial hub due to its proximity to ports, high-quality infrastructure, and favorable government policies. LG’s decision to invest here underscores the area’s potential as a manufacturing powerhouse.

The facility will not only serve the domestic market but could also become an export hub for LG appliances in the future, aligning with India’s vision of becoming a global manufacturing hub under the ‘Make in India’ initiative.