Government Mulls Fridge Import Curbs To Spur Local Manufacturing

Government contemplating banning import of refrigerators to boost local manufacturing

New Delhi:

India is considering restricting imports of refrigerators to boost local manufacturing, two industry sources told Reuters on Thursday, potentially limiting shipments from Samsung Electronics Co and LG Electronics Inc in the $5 billion market. Freeze.

Sources who declined to be named as the talks were private said the government is looking at mandating that importers seek licenses from authorities in place of the existing free-import regime.

This could then lead to a ban on the import of refrigerators with refrigerants already added to create opportunities for value-added operations in India, said a source, who has direct knowledge of the government’s discussions.

The source said a decision could come within a month, adding that “the emphasis is to support all those who are manufacturing in India, not bringing them to India.”

The commerce ministry did not immediately respond to requests for comment. Spokesmen for Samsung and LG also did not immediately respond.

Another source said, delays in a licensing regime, compliance burden and risk would increase imports.

The government estimates that India’s refrigerator market is worth over $5 billion, with foreign companies such as Samsung and LG competing with domestic majors including Tata Group’s Voltas Ltd.

The first source said that India’s annual refrigerator manufacturing capacity was around 24 million units, but the demand was only 15 million, a part of which is met by imports.

The government does not release refrigerator import figures, although another source said companies such as Samsung and LG import thousands of high-end refrigerators annually.

A third industry source said sales of large, high-end refrigerators, many of which are imported, are increasing rapidly, especially during the COVID-19 pandemic as people stay indoors. These imports account for about 5-6 percent of India’s total sales.

The move is in line with Prime Minister Narendra Modi’s “Make in India” program to promote local manufacturing and discourage imports.

India banned the import of air conditioners with pre-added refrigerants in 2020. In the same year it also banned television imports, affecting Samsung and other global manufacturers.

India imports refrigerators from countries with which it has free trade agreements, including Bangladesh, Thailand, Indonesia and South Korea.

Local manufacturers that could benefit from import restrictions include Voltas, Godrej Appliances and Havells India Ltd.

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