The Indian government has banned the import of fully built-air conditioners with refrigerants. This move aims to provide a boost to the domestic production of AC systems in India and to promote the government's Aatmanirbhar Bharat initiative.

It is also expected that this move is likely to boost the capacities dedicated to third-party manufacturing in the country. However, according to experts, most companies are heavily reliant on imports for critical and essential components, such as compressors from markets such as China and other free trade agreement (FTA) countries such as Thailand, Vietnam, and Malaysia. According to the notification issued by the Director-General of Foreign Trade (DGFT), imports of all types of split and window air-conditioning systems with refrigerants have now been put into the prohibited category from the earlier free category.

As per industry estimates: the domestic market of air conditioners in India is huge and is believed to be around $5-6 billion. The total annual market size of air-conditioners sold in India is estimated to be around 65 lakh units. Fully built units of imported AC systems currently account for about 28-30% of the air-conditioners segment. The government, however, wants local manufacturers to increase production and sales, decrease reliance on imports from other countries, and take part in its Aatmanirbhar Bharat initiative.