India plans to limit fridge imports to boost local industry

India plans to restrict fridge imports to promote local manufacturing, two industry sources say Reuters on Thursday, potentially freezing shipments from Samsung Electronics Co and LG Electronics Inc to the $5 billion market.

The sources, who declined to be named as the talks were private, said the government was considering requiring importers to apply for a license from authorities, replacing the existing free import regime.

This could be followed by a ban on imports of refrigerators with already added refrigerant, to create opportunities for value-added operations in India, said one of the sources, who has direct knowledge of the government discussions.

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The source said a decision could come within a month, adding, “The aim is to support everyone who manufactures in India rather than those who bring it to India.”

India’s Commerce Ministry did not immediately respond to requests for comment. Spokespersons for Samsung and LG also did not immediately respond.

A licensing regime, according to the other source, would increase the compliance burden and risk delaying imports.

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

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

The government does not release figures on refrigerator imports, although the second source said companies such as Samsung and LG import thousands of high-end refrigerators each year.

A third industry source said sales of large, high-end refrigerators, many of which are imported, have grown rapidly, particularly during the Covid-19 pandemic, as people have stayed indoors. These imports account for about 5-6% of total Indian sales.

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

India in 2020 banned the import of air conditioners with already added refrigerant. In the same year, it also imposed restrictions on TV imports, affecting Samsung and other global manufacturers.

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

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

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