LG Electronics Commits $600 Million to New Indian Factory, Bolstering FDI and Manufacturing Footprint
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In a significant endorsement of India&rsquo;s manufacturing potential and consumer market, South Korea&rsquo;s LG Electronics has unveiled plans to invest $600 million in a new home appliance facility in Sri City, Andhra Pradesh. The move marks a substantial expansion of the company&rsquo;s production footprint in the country and reinforces India&rsquo;s status as a key destination for foreign direct investment (FDI) in the electronics and consumer durables sector.
The announcement came on Thursday as LG confirmed it would soon break ground on the new plant, which is scheduled to commence operations by the end of 2026. The facility, strategically located in the industrial corridor of Sri City, will have a robust annual manufacturing capacity: 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners, and 2 million air conditioner compressors.
Senior company officials, including Lyu Jae-cheol, President of LG&rsquo;s Home Appliance &amp; Air Solution division, will attend the groundbreaking ceremony, along with key dignitaries from the Andhra Pradesh government, notably Nara Lokesh, the state's Minister for Human Resource Development.
The plant will be LG Electronics' third production base in India, supplementing existing facilities in Noida (Uttar Pradesh) and Pune (Maharashtra). More than just a domestic capacity boost, the Sri City site is envisioned as a regional manufacturing hub serving not only India but also neighbouring markets such as Bangladesh and countries across the Middle East.
"This new plant is more than just a factory&mdash;it is a strategic cornerstone in LG's journey to deepen its roots in India," said Lyu. "By strengthening our local supply chain and introducing state-of-the-art products tailored to Indian consumers, we aim to cement our position as the nation's leading home appliance brand."
The announcement is in line with LG&rsquo;s broader global expansion strategy. In March, LG Group Chairman Koo Kwang-mo visited India for a four-day tour to assess operations and explore new growth avenues. His itinerary included visits to LG&rsquo;s manufacturing unit in New Delhi and its software research facility in Bengaluru&mdash;LG Soft India, the company&rsquo;s largest overseas R&amp;D centre.
Chairman Koo underscored India's pivotal role in LG's long-term vision, describing the country as central to LG&rsquo;s "second leap"&mdash;a phrase used internally to denote its renewed global push in the era of digital transformation and climate-conscious innovation.
Sources close to the matter also confirm that LG Electronics is actively exploring an initial public offering (IPO) in India, a move that would further deepen its financial and operational integration into the market.
With India&rsquo;s FDI policy increasingly favouring technology transfer and domestic value addition, LG&rsquo;s latest investment is expected to generate significant employment, support component ecosystem development, and serve as a vote of confidence in India&rsquo;s &lsquo;Make in India&rsquo; initiative.
LG's Investment History:
<ul type="disc">
<li class="MsoNormal">1997: LG Electronics begins operations in India with its first factory in Noida, Uttar Pradesh.</li>
<li class="MsoNormal">2004: Second facility launched in Pune, Maharashtra, expanding production of refrigerators and washing machines.</li>
<li class="MsoNormal">2024: Announces $600 million investment for a third plant in Sri City, Andhra Pradesh.</li>
<li class="MsoNormal">R&amp;D Focus: Bengaluru-based LG Soft India becomes the company&rsquo;s largest overseas software research centre.</li>
<li class="MsoNormal">IPO Plans: LG is actively considering a public listing in India to strengthen local presence.</li>
<li class="MsoNormal">Regional Hub Vision: The Sri City plant will serve neighbouring markets including Bangladesh and the Middle East.</li>
</ul>
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May 8, 2025 | 09:58 IST