Budget 2020: ACs, refrigerators, some fans set to become expensive

As far as refrigerators are concerned, only LG and Godrej manufacture compressors in India. The rest of the industry imports this component from abroad. Similarly, AC compressors are majorly imported from places like China.

For ACs, this is a double whammy. AC prices are already high due to a 28 percent goods and services tax on the product.

Further, the customs duty on refrigerating equipment like freezers has also been hiked to 15 percent. However, this is only for commercial refrigerators.

The thrust by the government is to promote 'Make in India'. Hence the customs duty on a host of home appliances.

For fans, the customs duty has been hiked to 20 percent from 10 percent for all categories including table fans, ceiling fans and pedestal fans. However, this is not expected to have a big impact since a majority of fans are manufactured in India.

On one hand while the finance ministry’s endeavour is to boost local manufacturing of electrical appliances, the fact is that only 30-35 percent is fully manufactured in India. The rest of the products have one or more key components being imported.

For televisions, the nil open-cell panel customs duty is applicable till September 2020. Finance minister Nirmala Sitharaman said that the government will review the rates after September.  If the customs duty is hiked post that, televisions will become expensive since the open cell is what makes the television panel.