In order to promote domestic manufacturing of air conditioners in the country, the government has revised the import policy of Air Conditioners with refrigerants under HS Codes 84151010 and 84151090.
"The Notification to prohibit the import of Air Conditioners with refrigerants will boost AC manufacturing in India and create more jobs. This move is consistent with the government's twin objectives of making India fully self-reliant in manufacturing air conditioners and capturing a greater share of the global AC market through export," says Kamal Nandi, President - CEAMA, and Business Head & EVP, Godrej Appliances.
Currently, approximately 30 per cent of ACs are imported into India as CBUs. As per a CEAMA- Frost & Sullivan report, the market for household Air Conditioners was 6.5 million in 2019 and employs over 62,000 people directly and double of it indirectly. "India has one of the lowest penetrations of ACs in the world at 5 per cent and has tremendous opportunity for long and sustainable growth with the report estimating domestic demand to grow to 16 million units by FY25. With soaring temperatures each year, ACs are now a necessity for enhancing comfort at home and productivity in the workplace and hence, keeping consumers interests in mind, it would be good if the GST slabs on ACs are also lowered from 28 per cent to 18 per cent," adds Nandi.
Amending the policy, Director General of Foreign Trade has revised the existing policy from free to prohibited. The move has been welcomed by the domestic as well as international players having operations in India.
Manish Sharma, President & CEO, Panasonic India & SA, says, "We believe the amendment to the import policy with reference to Air Conditioners is a step in the right direction and in line with the Atmanirbhar strategy announced by the Prime Minister." Panasonic has set up Air Conditioner factory in 2012 in Haryana and has been manufacturing 100 per cent in India and catering to local demand as well as exports. Panasonic currently export Air Conditioners from India to SAARC, Middle East and Africa.
Entire line up of LG Air conditioners is made in India at the advanced and eco-friendly manufacturing facilities at Greater Noida & Pune.
"We welcome this move; it will boost make-in-India initiative. I am confident this announcement will support PM Modi's vision of Atmanirbhar Bharat," says, Vijay Babu- VP-Home Appliances- LG Electronics India. LG will continue to invest in its manufacturing facilities and offer products that are developed based on Indian insights and are made in India.
Echoing the sentiment, Anil Rai Gupta, CMD, Havells India Limited says, "This decision of prohibiting AC imports is in line with the government's Aatmanirbhar Bharat vision and we welcome this decision wholeheartedly. We believe the companies who have invested in their own manufacturing facility will be well placed to benefit from it."
Lloyd air conditioners too are being manufactured in-house at a state-of-the-art plant developed with an investment of around 400 crores, which Havells claim is among the most integrated and modern facilities in Asia. Owing to the belief in the Make in India vision, Havells has been investing substantially both in terms of manufacturing scale and workforce across all products segments and portfolio.
"Recently we also announced our intention to share Panasonic's manufacturing technology and help select companies manufacture Refrigerators and Air Conditioners reducing dependency on imports and driving the Make in India agenda," adds Sharma.