Govt Considers Restricting Fridge Imports To Boost Local Industry: Report

India's refrigerator market at more than $5 billion, with foreign firms like Samsung and LG competing with domestic majors, including the Tata conglomerate's Voltas, according to government's estimate

India imports refrigerators from countries with which it holds a free trade agreement, including Bangladesh, Thailand, Indonesia, and South Korea.

Source : Getty

The central government is mulling restricting imports of refrigerators to promote local manufacturing, quoting two sources news agency Reuters reported on Thursday. The move, if materialised, could potentially freeze out shipments from Samsung Electronics and LG Electronics in the $5 billion Indian market.

According to the report, the sources said the government was considering mandating that importers seek a licence from the authorities, replacing the existing free-import regime. One of the sources said, this could be followed by a ban on imports of refrigerators with refrigerant already added, to create opportunities for value-added operations in India.

The move is in line with Prime Minister Narendra Modi's Make in India programme to boost local manufacturing and discourage imports.

A decision on this could come within a month, a source said, while adding: "The thrust is to support all those who are manufacturing in India rather than those bringing them into India."

The Union trade and commerce ministry did not immediately respond to Reuter’s requests for comment. Spokespeople for Samsung and LG also did not respond.

A licensing regime, the other source said, would raise the compliance burden and risk delaying imports.

The government estimates India's refrigerator market at more than $5 billion, with foreign firms such as Samsung and LG competing with domestic majors, including the Tata conglomerate's Voltas Ltd.

The first source said India's annual fridge-making capacity was around 2.4 crore units but demand was only some 1.5 crore, a part of which is met by imports.

The government does not release figures for refrigerator imports, although the second 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, have been growing rapidly, especially during the Covid-19 pandemic as people stayed indoors. Those imports account for roughly 5-6 per cent of total India sales.

India in 2020 banned the import of air conditioners with refrigerant already added. That same year the government also placed curbs on television imports, affecting Samsung and other global manufacturers.

India imports refrigerators from countries with which it holds a free trade agreement, including Bangladesh, Thailand, Indonesia, and South Korea.

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