India LED light bulb procurement leading to large price cuts, say Taiwan makers

The India government has started open-bids for two million LED light bulbs in two years for subsidizing purchases by local consumers, and wining prices for a 7W-equivalent 600lm LED light bulb have drastically dropped from INR230 (US$3.59) to about INR100 in the first quarter of 2015 and further to INR80 currently due to intense competition, according to Taiwan-based supply chain makers.

The India government requires that suppliers assemble LED light bulbs in India through cooperation with India-based lamp vendors/makers, the sources said. The government holds open-bids to procure about two million LED light bulbs every one to two months and has so far procured about 10 million units, the sources noted.

The India government initially demanded adoption of LED lighting devices supplied by international vendors including Nichia, Lumileds Holding, Cree and Osram, but has loosened the restrictions, the sources indicated. As a result, several China-based LED or LED lighting makers, including MLS, Foshan Lighting, Foshan Nationstar Optoelectronics and Guangzhou Hongli Opto-Electronic, and Taiwan-based fellow makers such as Edison Opto and Everlight Electronics have passed supplier qualification examinations, the sources said.

Although large price reductions have rendered bid winners profitless, LED and LED lighting makers regard participation as a gateway to the India LED lighting market which has large potential demand, and this has led to increasing competition, the sources indicated.