India’sAC  Struggles Heat Up Amid Chinese Dependence

India braces for a hotter summer as it battles an AC component shortage, heavily reliant on Chinese imports. Can local production catch up?

India’s Cooling Crisis: Can Domestic AC Manufacturing Beat the Heat?

As a scorching summer tightens its grip across India, millions are reaching for the remote in hopes of relief—only to find their air conditioners either unavailable or suddenly more expensive. The cause? A quiet yet critical dependency on China for the heart and soul of these cooling machines: the compressor.

According to the Indian Meteorological Department (IMD), temperatures are expected to spike significantly from April through June, with vast swaths of the country—especially the Central, Eastern, and Northwestern plains—bracing for prolonged and severe heatwaves. Already, over 20 cities have breached the 42°C mark, with Delhi, Rajasthan, and parts of Uttar Pradesh bearing the brunt.

But while the sun scorches, another pressure is building indoors. India’s air conditioning industry, which has been growing steadily to meet the rising demand, finds itself shackled by a supply chain that heavily leans on Chinese imports.

AC Industry’s Hidden Weakness: Dependence on China

Nearly 65% of India’s room air-conditioner components—such as compressors, PCBs (printed circuit boards), fan motors, and grooved copper tubes—are imported, primarily from China. These components are the backbone of air conditioners, and any disruption in their supply chain leaves Indian manufacturers gasping for air.

Ajay DD Singhania, CEO of Epack Durable, a major contract manufacturer, noted earlier this year that Chinese compressor availability had sharply declined as China ramped up exports to the US, pushing Indian demand to the sidelines. Local production, meanwhile, covers only about 35% of the country’s compressor requirements.

This imbalance has left Indian companies at the mercy of geopolitics and regulatory hurdles. Adding to the strain is the lingering impact of Press Note 3, a policy introduced in 2020 requiring government clearance for foreign direct investment from neighboring countries, including China. This regulation, born out of national security concerns following a deadly border clash with China, has stalled several India-China joint ventures aimed at easing supply shortages.

Government Steps In: Relaxing Standards to Avoid Crisis

In a move that offered temporary relief, the Indian government last month exempted certain critical air conditioner and refrigerator components from the Bureau of Indian Standards (BIS) certification—specifically grooved copper tubes and compressors over two tonnes, including those from China.

This decision by the Department for Promotion of Industry and Internal Trade (DPIIT) is seen as a pragmatic response to avert widespread shortages during peak summer. Manufacturers had warned of potential disruptions due to non-BIS-certified Chinese suppliers, leading to delayed or halted production.

However, industry insiders believe this is only a partial solution. “The waiver is necessary, but the government must also consider compressors under two tonnes and refrigerator components,” said a senior executive. Brands such as LG, Godrej, and Samsung have local refrigerator compressor capacity, but the AC side of the market remains fragile.

Long-Term Fix: Building India’s Compressor Ecosystem

While emergency policy tweaks may keep products on shelves this summer, India’s air conditioning sector needs a structural reboot. Industry leaders, including Panasonic India’s chief Manish Sharma, are calling for a dedicated Production-Linked Incentive (PLI) scheme focused solely on high-value AC components like compressors and motors.

The current PLI scheme for white goods, though helpful, lacks the depth required for capital-heavy manufacturing like compressors, which can demand investments of up to ₹400 crore per plant. A revised approach, allowing for controlled joint ventures with Chinese firms—where Indian companies retain majority stakes—could be a viable path forward.

Voltas learned the hard way when it had to abandon a joint venture with China’s Highly Group after failing to secure government approval. Yet with consumer demand soaring and climate change intensifying summer extremes, the cost of inaction may soon outweigh political caution.

The Road Ahead: Cooling India, Sustainably

The urgency is real. The IMD’s predictions point toward a hotter future, and with climate models suggesting that India will experience more frequent and intense heatwaves, the demand for cooling solutions is only going to grow. According to a 2023 report by the International Energy Agency (IEA), India’s cooling demand could rise five-fold by 2050.

This isn’t just about comfort—it’s about public health, productivity, and economic stability. A cooling infrastructure built on shaky imports is simply unsustainable. India needs to localize manufacturing, incentivize innovation, and build resilience into its supply chains.

Conclusion: Turning the Heat Into Opportunity

India’s reliance on Chinese imports for critical AC components has long been a silent vulnerability. But with this summer turning up the heat, both literally and metaphorically, the need for reform is no longer optional—it’s urgent.

By embracing strategic manufacturing incentives, encouraging responsible joint ventures, and expanding domestic production capacity, India can transform this dependency into a growth opportunity. In doing so, the nation not only stays cool in the face of rising temperatures but also asserts its independence in a warming world.

Disclaimer: This article is a reimagined version based on publicly available information and reports, crafted to inform and engage readers. All insights reflect journalistic interpretation and do not represent the views of any official agency or organization.