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India on late Thursday night imposed a complete ban on import of air-conditioners with refrigerants, further tightening norms on “non-essential imports" to encourage local manufacturing and reduce imports from China.

In July, India had put television sets in the restricted list, asking importers to seek licences from the Directorate General of Foreign Trade (DGFT). However, the ban on the import of air-conditioners is more severe as it prohibits imports of any kind.

Most imported air-conditioners are filled with refrigerants. India imported split ACs worth $469 million in FY20, including $241 million Chinese products and $189 million from Thailand. Likewise, window ACs worth $35 million were imported during the same period, with Thailand and China accounting for $18 million and $14 million, respectively.

Indian manufacturers such as Voltas Ltd and Havells India Ltd which makes Lloyd air-conditioners are set to benefit from the import ban.

Anil Rai Gupta, chairman and managing director at Havells India said companies which have invested in their own manufacturing facility will be well-placed to benefit from it. “Lloyd air-conditioners are now being manufactured in-house at our new state of-the-art plant developed with an investment of around 400 crore," he added.

Pradeep Bakshi, MD and CEO at Voltas Ltd said while the decision will play a crucial role in promoting domestic manufacturing, import of certain components will continue for some time as India is still at a nascent stage in terms of product technology. “However, the government’s decision is in the right direction and the industry will definitely benefit from it. At Voltas, we have always believed in being self-reliant and this is supported by our manufacturing facilities at Waghodia, Pantnagar and Sanand," he added.

Contract manufacturers also see big opportunity from the government’s decision. “What will happen with this notification is that 30% of the imports, in phase-one, will start getting assembled here and then in phase-two, they will start getting manufactured here and that will bring us economies of scale required for expanding the component ecosystem," said Jasbir Singh, chairman and chief executive officer, Amber Enterprises India Pvt. Ltd, that works as a contract manufacturer making air conditioners for several brands in India.

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