Buoyed by strong socio-economic growth and favourable government policies, the lighting industry in India is witnessing exponential growth year-on-year. Reports suggest that the Indian lighting industry will continue to grow at a higher rate per annum, ranging between 13 per cent and 15 per cent until 2020. As the demand for a smart, connected lifestyle and energy-efficient products is increasing, the Indian LED lighting industry is expected grow further.

As per a study conducted by ELCOMA (Electric Lamp and Component Manufacturers’ Association), the Indian LED lighting market has grown from Rs 500 crore in 2010 to over Rs 10,000 crore currently. It constitutes over 45 per cent of the overall Rs 22,000 crore lighting industry in India, comprising of all categories like GLS, FTL, CFL and other lamps. “Given the government’s push towards adoption of LEDs and their general consumer popularity, LED lighting will constitute a majority share of the total lighting market in the next few years,” said Sumit Joshi, Vice Chairman and Managing Director, Philips Lighting India.

Chennai Street Lighting Project (Photo Courtesy – Philips Lighting India)

However, he cautioned that the growing demand for LED lighting has also led to an increase in sales of unsafe and illegal products being used in households and offices by Indian consumers, endangering many. This, in Joshi’s opinion, is a very disturbing trend as these non-compliant manufacturers undertake various cost-cutting mechanisms, making them unsafe to use, less energy efficient and cheaper than compliant products.

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Ajay Saraf, Business Head – Professional Lighting, Havells India Ltd also opines that, a few unorganised and nonbranded players see this as an opportunity to sell their spurious and fake products which pose a serious threat not just to organised industry and government’s various initiatives but to end-consumers as well due to safety hazards. In this scenario, Saraf suggests, it is important for the government to act against these spurious and non-branded products in order to safeguard the interest of the consumer.

According to a recent Nielsen study conducted across 4 major Indian cities – New Delhi, Mumbai, Ahmedabad and Hyderabad; 76 per cent of LED bulb brands and 71 per cent of LED downlighter brands surveyed across 200 electrical retail outlets were found to be non-compliant with consumer safety standards, as prescribed and mandated for lighting products by the Bureau of Indian Standards (BIS) and Ministry of Electronics and Information Technology, Government of India. Not only are three-fourths of LED bulbs sold noncompliant, spurious and non-branded, but the market share for these products is steadily increasing. This continues to be a major concern for compliant lighting manufacturers in the country.

Furthermore, according to the report, 48 per cent of LED bulb brands have no mention of the manufacturer’s address and 31 per cent brands do not even have a manufacturer’s name. Hence these brands are also violating Indian legal metrology regulations and are being manufactured illegally.

Rashtrapati Bhavan Dynamic LED Facade Lighting using Philips Color Kinetics (Photo Courtesy – Philips Lighting India)

Joshi believes that these spurious products not only pose a serious safety hazard for consumers but also cause significant loss in tax revenues for the Government of India, as they are illegally manufactured and sold.

Wipro Lighting believes that the spurious and nonbranded LED products are not good for the consumers and for the industry as spurious materials are not following any specified quality parameters and flouting safety standards.

Vijaywada Railway Station Project (Photo Courtesy – Philips Lighting India)

“Non-branded LEDs consume more energy, have a much shorter life and low lumen output. In the long-term consumerends up spending more money buying a non-branded LED product as he has to use more lights for the same light output,” comments Sanjay Gupta, Senior Vice President and Business Head, Consumer Lighting and Switches, Wipro Consumer Care and Lighting.

“With the coming of BEE (standards) on LED lamps, the performance parameter of the products also needs to meet with the designed standard. Hence, not just the safety but the products has to comply with the performance standard which in turn will help in checking the influx of spurious quality products in the market,” observes Tushar Gupta, Executive Director, NTL Lemnis.

Light makers concerned over “spurious” LED products

Industry’s reputation is in stake

Quality is and will remain a big issue in the context of spurious and fake LEDs and unfortunately the whole industry suffers when fakes flood the market. Explaining the direct impact of market being flooded with spurious and nonbranded LED products on the industry performance, Sanjay Gupta of Wipro said, “Spurious and non-branded players bring bad name to the industry. Consumer tends to get an overall negative impression about the performance and reliability of LED lights.”

Tushar Gupta of NTL Lemnis also observes, “With low quality, the market loses faith in the new technology and the whole industry is impacted. The loss of reputation and belief of people in Indian consumers in Indian manufacturing is also shaken.”

Saraf of Havells India said, “Unbranded, low-quality products are denting the industry’s image and causing loss of business by delivering substandard products to the consumers while charging a premium.”

However, as per Saraf, at Havells India, the loss of business on account of spurious LED products poses no direct challenge to the company or on its performance due to the high levels of consumer awareness and the collective efforts of all stakeholders.

Havells Destello Light

May derail the energy efficiency campaign

Experts urges that the government should take strict action against low-quality products that do not adhere to safety standards prescribed by BIS and BEE and systems should be put in place so that distributors and retailers are not allowed to sell them. “Any potential mishaps due to these LED bulbs have the potential to derail the energy efficiency campaign run by the government and do massive damage to the industry per se,” Tushar Gupta of NTL Lemnis points out.

A blot on the PM’s ‘Make in India’?

The ‘Make in India’ initiative launched by Prime Minister Narendra Modi in 2014 was expected provide a boost to the domestic LED industry. However, dumping of spurious and non-branded LED products may hit ‘Make in India’. In this context, Tushar Gupta of NTL Lemnis observes, “The staggering numbers are also a blot on the PM’s ‘Make in India’ campaign, since most of these are low quality Chinese imports. In order to ensure that only quality products are available in the market, the government should immediately ensure that the procurement for EESL and government bodies is from Indian manufacturing only.”

Havells Mondo Light

Against the ‘ease of doing’ business

The non-branded LED products are a serious safety threat to not just consumers, but also for organised and compliant market players and government programs as they negatively impact government’s tax revenue collections, which would have otherwise been contributed by the formal sector. Hence, according to Sumit Joshi Philips Lighting India, they are defeating the investment objectives for companies and go against the ‘ease of doing’ business philosophy of the government of the day.

Sanjay Gupta of Wipro comments: “The spurious and non-branded players are of direct threat to the organised players in the industry as the industry invests in developing and maintaining the quality parameter and invests in adhering to all legal compliances to meet the product specification.”

North and South Block Dynamic LED Facade Lighting using Philips Color Kinetics (Photo Courtesy – Philips Lighting India)

Counter-strategy

Tighten quality controls

To improve the level playing field in the market and to bring the confidence among the consumers for the adoption of LED products, the government has tried to implement number of policies that will help in increasing the performance of the products and also increase the adoption of LED products.

Some of the steps taken by the government are putting Compulsory Registration Scheme (CRO) for BIS adherence for LED products, implementation of BEE (Energy Rating). “We expect the government to ensure strict adherence of these measures so that consumer does not gets a substandard product. At Wipro, we believe that such steps will bring parity in the industry and help in promoting energy efficient LED products,” said Sanjay Gupta of Wipro whereas Ajay Saraf of Havells India opines, “In order to curb spurious LED lights, the
government should tighten quality controls for consumer and capital goods and keep a strict vigilance over cheap imports from China.”

Strengthen compliance process

LED lighting continues to constitute a majority share of the total lighting market, and this is poised to grow over the next few years. Given this scenario, according to Sumit Joshi of Philips Lighting India, it is important for the government to act against the spurious and non-branded products for safeguarding consumer safety and protecting the industry revenues against these companies.

He adds, “In order to combat the growing supply of the spurious LED lights, the Indian lighting industry unanimously recommends a need for stronger enforcement for compliance to these safety standards prescribed and mandated by the Bureau of Indian Standards and Ministry of Electronics and Information Technology, Government of India.”

Today, BIS and BEE together focus on safety as well as the performance standards, but the compliance process is very weak. Tushar Gupta of NTL Lemnis observes that there are no performance standards that are mandatory and this could turn out to be the Achilles heel of the most energy-efficient lighting source. He firmly believes that the time has come to strengthen the safety and performance standards of BIS and make them mandatory. He adds, “We think that time has come, when some sort of anti-dumping duty should also be imposed on these imports so that the Indian consumers do not suffer.”