• India is considering banning refrigerator imports to promote local manufacture, sources say.
• This could block out shipments from Samsung and LG in the $5 billion sector.
• India’s yearly fridge-making capability was roughly 24 million units but demand was only 15 million, a part of which is fulfilled by imports.

Two industry sources told Reuters on Thursday that India is considering banning refrigerator imports to promote local manufacture, potentially blocking out shipments from Samsung Electronics and LG Electronics in the $5 billion sector.

The sources, who did not want to be identified because the discussions were private, said the administration was considering requiring importers to obtain a licence from the authorities, which would replace the current free-import arrangement.

According to one of the people with direct knowledge of the government’s discussions, this might be followed by a ban on imports of refrigerators with refrigerant already added, in order to create chances for value-added activities in India.

“The aim is to encourage all those who are producing in India rather than those who are bringing things into India,” the source said, adding that a decision might come within a month.

Requests for feedback from the Indian trade ministry were not immediately returned. Samsung and LG did not immediately reply to requests for comment.

According to the other source, a licencing scheme would increase the compliance burden and risk delaying imports.

The government estimates India’s refrigerator industry at more than $5 billion, with foreign corporations such as Samsung and LG battling with homegrown players including the Tata conglomerate’s Voltas Ltd.

The first source stated India’s yearly fridge-making capability was roughly 24 million units but demand was only some 15 million, a part of which is fulfilled by imports.

The government does not publish data on refrigerator imports, but according to a second source, Samsung and LG import thousands of high-end refrigerators each year.

Sales of huge, high-end refrigerators, many of which are imported, have been fast increasing, according to a third industry source, particularly during the COVID-19 pandemic, when people stayed indoors. These imports make up about 5% to 6% of total India sales.

The decision is in accordance with Prime Minister Narendra Modi’s “Make in India” initiative, which aims to encourage domestic production while reducing imports.

In 2020, India will prohibit the import of air conditioners that have already been filled with refrigerant. Import restrictions on televisions were imposed the same year, hurting Samsung and other global manufacturers.

Refrigerators are imported from Bangladesh, Thailand, Indonesia, and South Korea, all of which have free trade agreements with India.

Voltas, Godrej Appliances, and Havells India are among the local firms that could gain from import restrictions.

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