A notification issued by the directorate general of foreign trade (DGFT) moved split and “other” ACs with refrigerants into the “prohibited” category from the “free” list. They join the list of products such as tyres, TVs sets and agarbattis where import restrictions have been imposed.
While this means that an imported can’t fill refrigerant or gas outside and bring into the country, in reality it translates into a ban.
ACs 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.
As part of the plan prepared for the commerce and industry ministry by a group of CEOs led by Mahindra Group’s Pawan Goenka, a duty hike and reworking of the trade agreement with Thailand had been proposed.
As reported by TOI on June 3, import restrictions and support to domestic industry were part of the plan to turn India into a hub for manufacturing. On June 30, TOI had reported that rising tension with China was also prompting the government to evaluate licensing of some imports including those of ACs.