Television manufacturers in India are looking at boosting domestic manufacturing after the government announced a reduction in customs duty on open cell panels. A 10 percent duty was imposed earlier on these panels which account for two-thirds the cost of assembling LED sets. Open cell panels constitute two-thirds the cost of assembling LED televisions.
Now the government has brought down the duty to five percent, which comes as a relief for manufacturers who are now willing to restart their plans for building televisions in the country. As the Economic Times reports, companies including LG, Samsung, Panasonic, BPL, TCL and Sanyo are reviving their Make in India plans.
During the budget, a 10 percent duty was announced which led companies to shelve their plans. The companies argued it was cheaper to import ready-to-use television panels from South Korea, China and Southeast Asian countries on concessional duties than locally manufacturing.
However, with the latest announcement, it is now expected that the domestic manufacturing of televisions will be resurrected, which will also help create more jobs and invite investments. The Consumer Electronics and Appliances Manufacturers Association (CEAMA) expects that the revival of Make in India television plans will witness investments of over Rs 1,000 crore, while creating over thousands of jobs over the next one year. As per estimates, assembling of 1 million television sets a year creates 600-700 jobs.
Dixon Technologies chairman and CEAMA vice-president Sunil Vachani said that the reduction of duties will help revive local manufacturing, which was at risk since all companies had reviewed their decision against it. Panasonic India CEO Manish Sharma estimates that there will be an investment of about Rs 250-300 crore in the next three to four months.
“Around 25-30 percent of total TV production in India is done on open cell assembling, which will go up substantially. Moreover, since prices will now come down due to the reduction of duties, it will boost demand, which, in turn, will create additional manufacturing capacities,” Sharma is quoted as saying.
Sharma told BGR India, “We are pleased with the government of India’s announcement of revising the BCD duty to 5 percent. This brings back the emphasis on GoI’s ‘Make in India’ vision which will drive the momentum and develop new capacities for TVs within India. Going forward, the Consumer electronics industry can look forward to a developed manufacturing ecosystem whilst creating job opportunities.”
“Consumers, on the other hand, will stand to benefit as TV manufacturers plan to roll back and absorb most of the prices,” Sharma further said.
Avneet Singh Marwah, Director and CEO of Super Plastronics Pvt Ltd, a Kodak brand licensee, in response to the government’s move said, “This move that has been planned out, is a big boost for the ‘Make in India’ initiative and will encourage new jobs in the country.”
“Keeping this in mind, SPPL has decided to add another production line in the country. In my opinion, the duty on CBU should be further increased to foster the development of the manufacturing ecosystem in India. This will help cast down import brands which don’t wish to earn profit, but want to capture market share at the cost of disrupted pricing. This can snowball into a huge threat for our economy with regards to the trading cycle of our country,” adding, “I hope that the Government is taking corrective measures to make sure that import brands are investing and will continue to invest in the Indian market.”
Meanwhile, the government is reportedly also looking at expansion of open cell production, especially for large sizes which are still imported. As the report notes, online-focused brands such as BPL, TCL, and Sanyo will take the open-cell route for local production while Chinese brands are hopeful of the government to increase duties on completely built units from 2019-20 to make the manufacturing investment viable in the country.