Chinese AC compressor import rules eased for a year to tackle shortage
China has been the main source for all AC components including compressors since local production by the five manufacturers-China's compressor manufacturers Midea Group and Highly, and AC makers Daikin, LG and Mitsubishi-accounts for 35-37% of the demand.
Kolkata: The government has allowed imports of air-conditioner compressors of up to two tonnes from China without the mandatory Bureau of Indian Standards (BIS) certification of Chinese factories for one year, the commerce and industry ministry informed manufacturers on Tuesday through a gazette order.The move comes amid a severe shortage of the critical AC component in India.Ahead of the peak summer demand and insufficient local production of compressors, the industry had been demanding postponement of the BIS's quality control order (QCO) on AC which states manufacturers can only import components from BIS certified factories, whether in India or abroad.
China has been the main source for all AC components including compressors since local production by the five manufacturers-China's compressor manufacturers Midea Group and Highly, and AC makers Daikin, LG and Mitsubishi-accounts for 35-37% of the demand.
"This order will be a relief for the industry since local production is way less than the requirement," said Vikas Gupta, managing director (operations) at PG Electroplast, a large AC contract manufacturer. "This will allow the industry to even import from companies whose QCO may have already lapsed."
Jasbir Singh, the CEO of India's largest AC contract manufacturer, Amber Enterprises, said the postponement will take care of the shortage till next year's peak summer. "A lot of new manufacturing capacities are scheduled to come up by then which should sort out the shortage going forward," he said.ET had reported on March 28 that the government might relax the BIS rules for compressors of all capacities for a year. The government had tightened Chinese investment and imports in India after border clashes between the two nations in 2020 with non-tariff barriers such as QCOs and Press Note 3, which mandates government clearance for any Chinese foreign direct investment.The industry was seeking a three-year exemption of the QCO to allow local production to scale up. The compressor accounts for almost 20% of an AC's production cost. ACs with a capacity of up to two tonnes form more than 98% of the local market.As per the ministry order, the government said it will make changes to the 'Air Conditioner and its related Parts, Hermetic Compressor and Temperature Sensing Controls (Quality Control) Order' in public interest after consulting the BIS. The industry expects to sell around 15-16 million ACs in 2025 and touch 20 million next year. India's annual production capacity of AC compressors is 5.5-6 million units. In February, the Centre exempted mandatory BIS certification for importing grooved copper tube, another critical AC component, and compressors of two tonnes and above capacity, used in commercial ACs.BIS approval of Chinese refrigerator compressor manufacturer Wanbao Group lapsed in February, while Anhui Meizhi Compressor Company (refrigerator) and Highly Group's Shanghai plant (AC compressors) will lapse after June. BIS approvals of other large Chinese suppliers such as Jiaxipera Compressor Co, Avic Electromechanical (Shenyang) Sanyo Refrigeration Equipment Co and Highly Group's Nanchang plant too have lapsed.
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