Introduction
A fresh amendment has now been introduced under the Air Conditioner and its re
ed Parts, Hermetic Compressor and Temperature Sensing Controls (Quality Control) Order, 2019, through the Air Conditioner QCO Amendment 2026.. The notification was issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on 8 May 2026.
What changes here is not the removal of BIS requirements for the sector. Instead, the amendment creates a limited exemption window for certain imported compressors used by manufacturers for their own production activities.
From a compliance standpoint, this functions more as a controlled operational relaxation than a rollback of the broader QCO framework.
What Changed Under the Air Conditioner QCO Amendment 2026
The amendment introduces temporary exemptions for specific categories of imported hermetic compressors until 31 March 2027.
The exemption applies only where:
- The importer is a manufacturer of air-conditioning or refrigeration equipment,
- The imported compressors are being used for their own manufacturing purposes,
- And imports remain within the prescribed quantity limits linked to FY 2024–25 imports.
The notification categorises the exemption into four separate compressor segments.
1. Reciprocating Hermetic Compressors
This category covers fixed speed and inverter compressors below two tons of refrigeration capacity used in refrigerators and similar refrigeration equipment.
Permitted exemption:
Up to 40% of total imports made during FY 2024–25.
2. Rotary Hermetic Compressors
This applies to fixed speed and inverter rotary compressors below two tons capacity used in air conditioners and heat pump applications.
Permitted exemption:
Up to 30% of FY 2024–25 import quantity.
3. Scroll and Rotary Compressors Above 2 TR
The amendment also covers scroll and rotary hermetic compressors with a capacity of two tons and above used in refrigeration, air-conditioning, and heat pump systems.
Permitted exemption:
Up to 90% of FY 2024–25 imports.
4. VRF System Compressors
For variable refrigerant flow (VRF) air-conditioning systems, rotary hermetic compressors above two tons refrigeration capacity are allowed exemption up to the full historical import quantity.
Permitted exemption:
Up to 100% of FY 2024–25 import volume.
What This Does NOT Mean
The amendment does not suspend the Air Conditioner QCO.
It also does not remove BIS compliance obligations for the air-conditioning sector.
In practical terms:
- The QCO framework continues,
- BIS-related obligations still remain applicable where required,
- And the exemption is both conditional and quantity-linked.
This is important because many businesses may incorrectly interpret the notification as a complete relaxation of compressor imports. The language of the order specifically limits the exemption to manufacturers importing for their own manufacturing activities.
Independent traders or importers operating outside this structure cannot automatically assume exemption eligibility.
Understanding the Technical Structure
At a structural level, the amendment appears designed to balance two pressures simultaneously.
First, the government continues pushing domestic quality-control enforcement through the QCO mechanism.
Second, it acknowledges that parts of the refrigeration and air-conditioning ecosystem still rely on imported compressor supply chains, especially for advanced or high-capacity systems.
The amendment, therefore, introduces a temporary transition mechanism rather than a permanent policy shift.
Another important compliance layer appears in the reporting requirement.
Manufacturers availing this exemption must:
- Maintain monthly records,
- Submit signed records to the relevant authorities,
- And furnish an indigenisation plan to the Central Government.
That requirement strongly indicates that the exemption is being linked to future localisation expectations.
Industry Impact
Manufacturers
For many businesses, the Air Conditioner QCO Amendment 2026 may temporarily reduce sourcing pressure while localisation efforts continue evolving.
This becomes especially relevant for:
- inverter compressor sourcing,
- VRF systems,
- heat pump manufacturing,
- refrigeration equipment assembly,
- and specialised HVAC applications.
The relaxation may also help companies manage transition periods while domestic manufacturing ecosystems continue developing.
Importers
Importers will need to evaluate the wording of the notification carefully before assuming coverage.
The exemption is not drafted as a general import relaxation. Eligibility depends on manufacturing use, import category, and quantity thresholds linked to historical imports.
This means documentation and internal tracking become critical.
Compliance Teams
Compliance and regulatory teams now face an additional operational layer.
Businesses relying on the exemption may need systems for:
- monthly import monitoring,
- category-wise compressor classification,
- historical import benchmarking,
- reporting compliance,
- and indigenisation planning documentation.
For many organisations, the operational compliance burden may become just as important as the exemption benefit itself.
What to Watch Next
Companies evaluating the Air Conditioner QCO Amendment 2026 should continue monitoring future clarification notices and implementation guidance.
- implementation procedures,
- customs interpretation,
- reporting formats,
- documentary expectations,
- and verification mechanisms.
Industry stakeholders should also monitor future developments around:
- compressor localisation targets,
- refrigeration manufacturing policy,
- and additional QCO-linked amendments.
At this stage, the amendment creates a temporary controlled exemption pathway rather than a broader restructuring of the BIS quality-control framework.
Official Reference
DPIIT Notification: S.O. 2324(E) dated 8 May 2026 (Click to view)
Air Conditioner and its related Parts, Hermetic Compressor and Temperature Sensing Controls (Quality Control) Amendment Order, 2026.
Quick Takeaway
The Air Conditioner QCO Amendment 2026 introduces temporary import exemptions for selected compressor categories under specified quantity limits tied to FY 2024–25 imports. The broader BIS and QCO framework remains operational.
Manufacturers considering this exemption route should carefully evaluate applicability, import thresholds, reporting obligations, and manufacturing-use conditions before relying on the relaxation.
For guidance on BIS compliance, QCO applicability, import exemptions, or regulatory assessment for air-conditioning and refrigeration products, contact NKG Advisory at www.nkgabc.com or write to navraj@nkgabc.com.
