New Delhi: The move to reimpose a 5% import duty on open cell panels, a key component used in the manufacturing of television sets, will add pressure on the TV industry and impact prices of TV sets sold in India, industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA)said on Sunday.
Open cell panels, that form nearly 65% of the total production cost of televisions, will attract 5% import duty from 1 October, Mint reported earlier today citing governement sources. The duty exemption on imports of open cell panels expiring at the end of this month will not be extended as the government pushes to expand domestic manufacturing, the report said.
While government officials estimate that the impact of the duty could translate to Rs150-250 per television, manufacturers say end consumer prices could go by Rs400-1,200, depending on the size of the television set.
As part of ‘Atmanirbhar Bharat’ the government is keen to expand domestic production capacity for open cell panels as it seeks to curb imports. The year-long exemption given to open cell panels expires on 30 September, the Mint report said.
Industry body Consumer Electronics and Appliances Manufacturers Association or CEAMA said the move will add pressure on the industry that is already struggling from covid-induced pressure on consumer demand.
“The resumption of customs duty on Open Cells will put added pressure on the TV industry which is already reeling under stress due to COVID. This may make the domestic manufacturing uncompetitive and expensive. Open cell panels form nearly 65% of the total production cost of television and the imposition of duty may have an impact on the overall pricing of TVs,” said Kamal Nandi, president, CEAMA, and business head & EVP, Godrej Appliances.
India is entering the crucial festive season that accounts for a significant quantum of sales for electronics and appliances companies.
“The government needs to understand demand and supply, with this move, India becomes one of the top manufacturing countries to pay the highest duty and taxes on televisions in the world,” said Avneet Singh Marwah CEO SPPL, exclusive brand licensee of THOMSON televisions in India.“Firstly panel prices have been increased by 120% in China, now finance ministry will increase customs duty. This has come when industry was looking some support from government,” he said.
The impact on customer price due to the increase in custom duty could range from ₹400 to ₹1,200, depending on the size, he said.
Sales value of televisions in India is estimated at ₹25,000 crores. The industry employs an estimated 40,000 people directly, CEAMA said.Nandi said the industry is closely working with the government to formulate and facilitate both phased manufacturing and end-to-end manufacturing of televisions in the country.