The Hindu Business Line : ‘Treat consumer electronics on par with IT’

Chennai, July 29 By 2009-10, the demand-supply gap in the Indian consumer electronics will increase to $22 billion (Rs 90,000 crore), which will need to be met by imports.

Do you want to import or do you want to get the domestic industry gear up to meet the gap, so that economic value addition happens in the country? This is the rhetorical question that the consumer electronics industry is asking the Government.

If value addition has to happen in India, then the consumer electronics must be treated on par with the IT industry, says the Consumer Electronics and Appliances Manufacturers Association (CEAMA).

In a presentation to the Government of Tamil Nadu (for pitching for concessions), CEAMA noted that even today, the demand-supply gap in the industry is $10.4 billion (Rs 42,600 crore), all met by imports.

The association is irked by the huge burden of duties the consumer electronics industry has to bear — 16 per cent excise and 12.5 per cent VAT plus other State-level levies, adding to over 30 per cent.

In contrast, a unit in Thailand suffers only 7 per cent tax. One in China pays only 17 per cent. “How do we compete?” asks Mr Gulu Mirchandani, Chairman and Managing Director, Mirc Electronics Ltd, manufacturers of Onida TVs.

To add to the industry’s woes, for some consumer electronics products the import duty on finished products is lower than that on components. For example, the duty on panels for TVs is 20 per cent, while that on TV sets is 10 per cent, Mr Mirchandani noted.

“In today’s market, the difference between IT and non-IT products is getting blurred; (for example) one can view TV programmes on personal computers and on mobile phones,” he said.

Mr Ravinder Zutsi, Deputy Managing Director, Samsung India, said that the electronics hardware industry was set to grow to $160 billion by 2015.

More Stories on : Consumer Electronics | Tamil Nadu | Industry Associations

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