LG Electronics is planning to establish a third manufacturing facility in India, marking its first factory expansion in the country since completing the Pune plant in 2006. An LG Electronics official confirmed that the company is exploring ways to boost production capacity to meet the growing demand in India’s booming home appliance market. The exact location and construction timeline have yet to be finalized.
The company entered the Indian market in 1997, opening its first factory in Noida, Uttar Pradesh, followed by the Pune facility in Maharashtra in 2006. The Noida plant produces refrigerators, washing machines, air conditioners, ovens, and water purifiers, while the Pune factory manufactures similar appliances alongside televisions. Last year, LG Electronics invested 2 billion rupees (approximately 33 billion won) to expand its Pune facility with a new production line for side-by-side refrigerators, boosting its annual capacity by 100,000 units. However, surging demand has prompted the company to consider building a third plant to bolster production further.
The decision reflects India’s rapidly expanding consumer market. Despite a population exceeding 1.4 billion, penetration rates for home appliances remain relatively low. According to the Korea International Trade Association (KITA), only 38% of Indian households own refrigerators, 17% have washing machines, and 8% use air conditioners. Rising income levels, the growth of nuclear families, and an increasing number of working women are also fueling demand for appliances like dishwashers. The Korea Trade-Investment Promotion Agency (KOTRA) estimates that India’s home appliance market, valued at $11 billion (15.3 trillion won) in 2019, will grow to $21 billion by 2025
India’s strategic importance extends beyond its domestic market. With geopolitical tensions affecting China’s role in global supply chains, India is emerging as a viable alternative for manufacturers. LG Electronics has also benefited from strong consumer preference for South Korean products in India, holding the top market share for OLED TVs and air conditioners. This demand has driven consistent revenue growth for LG Electronics’ Indian operations. The subsidiary’s revenue rose from $1.88 billion (2.6255 trillion won) in 2021 to $2.21 billion (3.0733 trillion won) by the third quarter of this year, with analysts projecting it will surpass $2.87 billion (4 trillion won) by year-end. The company also plans to introduce subscription-based home appliance services in India to capitalize on the market’s growth potential.
Its Indian factories serve as export hubs, supplying products to markets in the Middle East and Africa. This dual focus on domestic and regional demand underscores India’s importance in the company’s global strategy.
Other South Korean firms are similarly scaling up investments in India. Last month, Hyundai Motor India (HIM), a subsidiary of Hyundai Motor Group, went public 28 years after entering the market, raising $3.23 billion (4.5 trillion won) through its IPO. The funds will support the company’s push into electric vehicles (EVs) and software development. HMI plans to launch the Creta EV, its first locally manufactured electric SUV, in January of next year.
CJ Logistics has also deepened its presence in India, entering the market in 2017 by acquiring a 50% stake in Darcl Logistics, the country’s leading transportation firm. Operating under the name CJ Darcl Logistics, the subsidiary manages 187 locations across India and serves over 3,000 clients with integrated logistics solutions. CJ Darcl reported first-half revenue of 407.4 billion won this year, a year-on-year increase of more than 10%, and is now exploring an IPO to fund further investments, including EV procurement.
“South Korean companies are intensifying their presence in India by expanding production capacity and raising capital through IPOs,” an industry expert noted. “They are leveraging India’s vast domestic market while positioning the country as a strategic hub for exports to nearby regions.”