Import of ACs decrease under India's ‘atmanirbhar’ policy

In a development that bore wells for Indian government's 'Atmanirbhar Bharat' policy that aims at self-sufficiency, the country has seen reduction of 65% split AC or air conditioners being imported. The policy that has been put in place calls for ACs that use local refrigerants. 

In October of 2020, the Directorate General of Foreign Trade (DGFT) issued a notification under which import of Air conditioners with refrigerants were prohibited.

According to DGFT data, October-November period of 2019 saw ACs worth 150 core Rs being imported, while October- November 2020 period saw only 52 ACs worth 52 crore Rs being imported, leading to a dramatic fall. And the trend continues.

As per industry information by Volza, as against import of 5,53,000 units of room air conditioners in January 2020, only 74,000 kits were imported in January of 2021, a reduction of 87%.

India is focusing on domestic manufacturing of ACs with its PLI (Production-Linked Incentive) scheme. The PLI scheme aims to give companies incentives on products being manufactured in India. 

Around 15-20 companies are waiting for PLI, with some already making announcements. Among the companies interested in setting up manufacturing are Japan’s Panasonic. Essentially the Atmanirbhar Bharat policy aims to reduce dependency on China.