New Delhi, October 16: Giving a major setback to China, the government has banned the import of air conditioners in its latest bid to boost domestic production. The import ban has been issued with the approval of the Minister of Commerce & Industry Piyush Goyal.
Directorate General of foreign trade (DGFT) issued the notification in which it moved split and “other” ACs with refrigerants into the “prohibited” category from the “free” list. The latest DGFT order is expected to provide a big boost for the domestic industry.
"Import policy of air conditioners with refrigerants ...is amended from free to prohibited," the Directorate General of Foreign Trade said.
AC's have been identified as potential items for focus on domestic manufacturing as components are imported in large quantities. The domestic market is said to be worth $5-6 billion with a large chunk of ACs being imported into the country. Separately, depending on the segment, 85-100% of the components, where the market is estimated to be around $2 billion, are imported.
The commerce and industry ministry has drawn out a plan along with a group of CEOs led by Pawan Goenka from the Mahindra Group to boost the production of ACs in India. Thus, a modification of the trade agreement with Thailand along with a duty hike has been proposed as some measures for the same.
According to the government, China and Thailand are the top exporters of air conditioners to India, as per government data. Together the two contribute over 90% of India’s imports of the good.
This comes amid when the government is intended to reduce the import bill of non-essential goods and promote domestic manufacturing under the Atmanirbhar India policy.
With this notification, they join the list of products such as tires, TVs sets, and Agarbattis where import restrictions have been imposed. Earlier, the government put restrictions on imports on items such as tires, Agarbattis, and TV sets.