India’s decision to restrict import of air-conditioners (ACs) to promote local manufacturing prompted Japanese companies to lodge a protest with New Delhi, two people familiar with the matter said. AC imports registered a 87% fall to 74,000 in January, from 553,000 units in the year-ago, as per industry data.

However, the AC manufacturers, who raised the matter through the Japanese embassy in New Delhi, were “advised” to set up local facilities, as the Indian government’s restrictions were part of the ‘Make in India’ policy, they added.

On 15 October, the directorate general of foreign trade, under the ministry of commerce and industry, banned import of both window and split ACs with refrigerants, listing the products under the “restricted” category.

“Moving ACs to restricted category means an importer has to seek an import license from the government. The purpose of this move was to check the influx of imported ACs and encourage domestic production,” one of the two people, an official of the economics ministry, said.

The government requested the Japanese firms to consider setting up facilities in India and enjoy the benefits, including financial support, of the production-linked incentives (PLI) scheme, he added.

The second person, with direct knowledge of the matter, said: “A number of Japanese firms have represented against this (import restriction) measure and held virtual meetings with the commerce ministry along with diplomats of the two countries.”

Most Japanese ACs is imported to India from manufacturing plants in East Asian countries, he said. The commerce ministry, the ministry of external affairs and the Japanese embassy did not respond to Hindustan Times’ queries on the meetings.

The first person said the change in import policy has worked well and the impact is expected to be seen more this summer.

In a similar move, the DGFT in July last year put import of colour TVs in the restricted list to check influx from China and South-East Asian countries.

Source: livemint