New Delhi: The move to re-impose a 5% import tariff on open cell panels, a key component used in making televisions, will add pressure on the television industry and impact the prices of televisions sold in India. Industry Consumer Electronics and Appliances Manufacturers Association (CEAMA) said on Sunday.
The open cell panels, which make up nearly 65% of the TVs’ total production cost, will receive a 5% import duty from October 1, Mint reported today, citing government sources. The exemption from tariffs on imports of open cell panels due at the end of this month will not be extended as the government pushes to expand domestic manufacturing, according to the report.
While government officials estimate that the impact of the tax could translate into Rs150-250 per TV, manufacturers say final consumer prices could rise by Rs400-1,200, depending on the size of the TV.
As part of ‘Atmanirbhar Bharat’, the government is keen to expand the domestic production capacity of open cell panels as it seeks to curb imports. The one-year exemption granted to open cell panels expires Sept. 30, according to the Mint report.
The Industry Household and Home Appliance 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 duties on Open Cells will put additional pressure on the television industry, which is already reeling from stress due to COVID. This can make domestic manufacturing uncompetitive and expensive. Open cell panels constitute almost 65% of the total cost of television production and the imposition of tariffs can have an impact on the overall price of televisions, “said Kamal Nandi, president of CEAMA and commercial director and executive vice president of Godrej Appliances.
India is entering the crucial holiday season which represents a significant amount of sales for electronics and home appliance companies.
“The government must understand supply and demand; with this measure, India becomes one of the main manufacturing countries paying the highest tariffs and taxes in the world on televisions,” said Avneet Singh Marwah, CEO of SPPL, exclusive licensee THOMSON TV brand in India. “Firstly, panel prices have increased by 120% in China, now the Ministry of Finance will increase customs duties. This has happened when the industry was seeking some support from the government,” he said.
The impact on customer price due to increased customs duties could range from ₹400 to ₹1,200, depending on size, he said.
The sales value of televisions in India is estimated at ₹25 billion rupees. The industry employs some 40,000 people directly, CEAMA said. Nandi said the industry is working closely with the government to formulate and facilitate both phased manufacturing and end-to-end television manufacturing in the country.
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