By Aroosa Ahmed Janaki Krishnan

Copyright thehindubusinessline

LG Electronics aims to position India as a global manufacturing hub and will also be diversifying its portfolio of Business-to-Business (B2B) and service business, a top executive told businessline, on the sidelines of its IPO event.

“The focused areas are our B2B business, which is mainly based on two strong pillars which are the HVAC system, including commercial ACs, and the second is the information display panel and eBlackboards,” said Sanjay Chitkara, Chief Sales Officer, LG Electronics India.

India is the only other country where LG Electronics will be listed outside South Korea and the plan is to make it into a global manufacturing hub.

“India is a very important country for us and we aim to increase our exports from here,” Chief Operating Officer Ashish Agarwal said.

Its third manufacturing facility coming up in SriCity, Andhra Pradesh with an investment of $600 million, will be operational in November 2026 and is part of its strategy to make India a global hub.

Its biggest strength is it local manufacturing, and Chitkara said it is scaling up its services business that includes its annual maintenance contracts.

“Our products are designed for a longer horizon, of 5 to 7 years before their next upgrades. We want their experience with our products to be excellent,” Chitkara said.

The company that owns 777 brand shops and 16 regional offices across the country is witnessing an uptick in its premium product categories. With the GST 2.0 implementation, the company is also seeing demand pickup in the mass segment as well.

“The GST rate cut is a direct enabler for our business, it improves the affordability of our products and also increases the demand for our products. More than demand and affordability, it is also helping in cross-sales” he said. “Similarly, it also helps for premiumization, so within that same budget now they can now upgrade the product.”

“We are a heavy cash-generating business. Our earnings are better than our industry peers, and we are generating free cash flow. The manufacturing facility would be funded from our own internal accruals going forward,” said Atul Khanna, Chief Accounts Officer, LG Electronics India.

LG has 27.5 per cent market share in televisions, with a 2.3 per cent share in OLED TVs, 29.5 per cent in refrigerators and 33.5 per cent in washing machines. The company stated that its localisation rate is 54 per cent and is increasing the rate by 3 per cent every year.

“In India, the penetration is low with microwave only 4 per cent, air-conditioners 11 per cent, and washing machines 21 per cent. Other economies, including China and the USA, have a penetration of 80-90 per cent. India is a strong consumption-based economy for the long term, and we see a lot of potential to improve our mass market products business,” said Chitkara.

The company has witnessed an uptick in its exports from India.

“Exports from India are nearly 6 per cent of our revenue, amounting to $160 million. We are exporting to 47 countries, mainly to Asia, the Middle East and Africa. Over the last year, we grew by 45 per cent in exports. With our parent company’s help, we have a global presence,” added Chitkara.

The company does not envisage any change in its royalty structure at present and intends to maintain it at current levels for the next few years.

The India unit pays a royalty of 2.3 per cent of net sales for products other than LCD televisions and monitors and 2.4 per cent of net sales for LCD televisions and monitors.

Published on October 1, 2025