Speaking to FE, Refrigerator and Airconditioner Manufacturers Association vice president Naishath Parekh said: "The household sector catering to requirements of homes, small offices, and establishments will be the main driver for growth in the RAC market. The household segment is expected to grow faster on strong fundamentals of economy compares to the period 1992-97 when drastic tax cuts resulted in substantial price drops."
While Mr Parekh emphasised the need for the government and industry to cooperate to develop the domestic market as in China, he said it was imperative that excise and customs duties be streamlined and that there be a complete replacement of the current state taxes by a single value added tax (VAT) later this year.
Mr Parekh, who is also deputy chairman of the Confederation of Indian Industry (CII) western region, indicated that his forecast of 35 per cent CAGR until 2008 was still only a very conservative view. "Household airconditioners are no more a luxury product and are capable of pushing the industry to perform at a CAGR of 70 per cent."