New energy label norms: Five-star refrigerators to cost Rs 6,000 more

The new energy labelling norms are expected to make manufacturing of five-star refrigerators costlier by up to Rs 6,000.

New Delhi: The new energy labelling norms, which will be effective from January next year, are expected to make manufacturing of five-star refrigerators costlier by up to Rs 6,000, industry body CEAMA said.

The labelling guidelines will mandate the manufacturers to shift to vacuum panels from the traditional foams for cooling for the five-star range of refrigerators, which will be a challenge for the industry, the Consumer Electronics and Appliances Manufacturers Association (CEAMA) said.

The Star Rating label change for compressor-based products like room air conditioners (RAC) and refrigerators by the Bureau of Energy Efficiency (BEE) would be effective from January 2020 and both frost free and direct cooling are changing to one star.

Now with this change, it will be difficult for the industry to roll out five star label refrigerators as the table change of the energy efficiency norms is happening in January.

"The same product which is now available at some price would go up by at least Rs 5,000 to Rs 6,000 because we have to put a vacuum panel to get a 5 star refrigerator," said CEAMA President Kamal Nandi.

He further said "nobody would pay that amount and I also do not have that scale to put that investment on my plant as that requires a different line for that".

On the performance of the appliance and consumer electronics industry, Nandi said it is back on growth path.

In FY 2018-19, the segment grew by around 12 to 13 per cent, largely led by categories as AC and washing machines, said Nandi.

In the TV segment, Nandi said, online channel saw growth. Some new small brands did "extremely well" last fiscal, he added.

In FY 2017-18, the industry saw almost flat growth and even there was degrowth in some of the segments.

In the first half of this year, AC segment saw good growth.

"We are growing by 15 per cent in H1 (April-September) and this is again largely led by air conditioners, which is growing in excess of 35 per cent overall," he said adding that sales of AC is on rise.

The association is also requesting the government to reduce the GST on AC and bring it to lower slab of 18 per cent, which would help the segment to grow as the penetration level is below 5 per cent.

Over the government's mandate on Extended Producer Responsibility (EPR), which mandates the makers to get their waste collected, Nandi said it would impact profit margin and instead there should be a better system to get it collected from customers.