India’s decision to promote domestic manufacturing by restricting imports of air-conditioners led to a sharp 87% fall from 553,000 units in January last year to 74,000 in the month this time, prompting Japanese manufacturers to protest in New Delhi, two people familiar with the matter said.
Several Japanese AC manufacturers have raised this matter through their embassy but have been “advised” to set up facilities in India as these restrictions are part of the government’s Make In India policy, said the people cited above.
On October 15, 2020, the Directorate General of Foreign Trade, an arm of the ministry of commerce and industry, banned the import of air-conditioners with refrigerants. The notification moved both window and split ACs from the “free” to the “restricted” category. “Moving ACs in the restricted category would mean an importer has to seek import licence from the government. The purpose of this move is to check the influx of imported ACs and encourage domestic production,” one of the persons working in an economic ministry said.
The government has asked Japanese firms to consider setting up manufacturing units in India and avail help, including financial support under the production-linked incentives (PLI) scheme, he added.
{{/usCountry}}The government has asked Japanese firms to consider setting up manufacturing units in India and avail help, including financial support under the production-linked incentives (PLI) scheme, he added.
{{/usCountry}}A second person, who has direct knowledge of the matter, said: “A number of Japanese companies have represented against this [import restriction] measure and also held virtual meetings with the commerce ministry along with diplomats of the two countries.”
Most of the Japanese ACs come from their manufacturing plants in east Asian countries, he said. The commerce ministry, the ministry of external affairs and the Japanese embassy did not respond to queries.