Government may license import of ACs, TVs to check shipments

The government is looking to license the import of 10-12 items, including air conditioners and several of its components, and parts of television sets as it discourages the entry of foreign goods into the country, especially those from China.
While work on licensing of products had started a few months ago, with agarbatti and tyres being among the initial set of items along with palm oil, the list has expanded in recent weeks as tension on the Ladakh border escalated, government sources told TOI.

The focus on reducing import of products such as air conditioners and its components is also part of an exercise to boost domestic production of around a dozen items. While imports can be regulated in multiple ways — including an increase in customs duty and putting in place barriers such as technical standards — licensing and allowing entry of specific goods only from designated ports are being discussed.

Unlike duty hikes, which are across the board, licensing can allow for import from select countries. Similarly, entry through designated ports helps monitor the goods better without holding up entry of all items.

Air conditioners, along with steel, aluminum, footwear, potato and oranges, is among the initial set of items where local manufacturing is proposed to be incentivised with another dozen items, including lithium ion batteries, antibiotics, petrochemicals, auto and mobile parts, toys, sports goods, TV sets, solar equipment and electronics integrated circuits, added to the list by the commerce and industry ministry, which is overseeing the process.

Sources said the Directorate General of Foreign Trade has been asked to look at a set of goods where the licensing option can be exercised with ACs being among the first set of items. During a recent presentation before commerce and industry minister Piyush Goyal, a group of CEOs and industry representatives headed by Mahindra & Mahindra managing director Pawan Goenka had pointed to the need for import restrictions through higher duties apart from several measures.

A group comprising Panasonic MD Manish Sharma had worked on the initial set of proposals as the government realised that nearly a third of the 7 million air conditioners were being imported, with the rest being assembled in the country. Within the assembled category, nearly 90% of the compressors were being imported from China and Thailand.

In case of TV sets, the main hurdle is the absence of fabrication facility in the country and recent increase in import duty has pushed companies such as Samsung to import from Vietnam by taking advantage of India’s free trade agreement with Asean countries.