India delivers another jolt to China; bans Air Conditioner imports

New Delhi: – India has delivered another jolt to China, with changes in the regulations for import of air-conditioners. The government has moved the air-conditioners with refrigerant from the open category to the prohibited category. The government said that this decision has been taken to provide an impetus to the local industry. But it is being claimed that the decision has been taken to target the imports from China. The basis for the claim is that 85% of the spare parts required for air-conditioner manufacture are imported and the majority of these imports are from China.

India has taken tough decisions to reduce imports and stop investments from China. 218 Chinese apps were banned, citing national security concerns. The regulations for investments coming from neighbouring countries have been made more stringent. Rules relating to government tenders have been changed to prevent the participation of Chinese companies. The imports from China were stopped by including colour TVs and tyres in the list of non-essential goods. Now the air-conditioners with refrigerant, also have been included in this category.

Air-conditioners with refrigerant have been moved from open to a prohibited category, which means that the importer will have to acquire a license for importing an air-conditioner. Director-General of Foreign Trade (DGFT), though a notification, informed that this decision is to promote indigenous production and stop imports of unnecessary goods.

China has a share of nearly 28% in the Indian air conditioner market. The second highest imports of air-conditioner spares, after China, are from Thailand. As per government statistics, 90% of the spares are imported from these two countries. The Indian Air-conditioner market is worth $5 to $6 billion. 85% of the Air-conditioner spares are imported from China and they are valued at $2 billion. The Chinese air-conditioners have been banned to encourage domestic companies under the Atmanirbhar Bharat campaign. This will certainly affect Chinese companies.