Hefty import duty may boost demand for domestic flat panel TV sets

The Union Government’s decision to impose 36.05 per cent duty on imported flat panel TVs is likely to bolster the market for LCD and LED televisions in the country — particularly in Kerala and West Bengal where NRIs and passengers flying in from abroad bring in free-baggage TV sets from the Gulf and Thailand.

According to Vipul Mathur, Vice-President, Marketing, Onida, the duty would increase the domestic demand for flat panels by 15 per cent a year as imports would taper off after August 26 when the duty takes effect. The hefty duty would make imported flat panel TVs more expensive than those available in India.

Mathur told

Business Line that over one million flat panel TVs were being brought into the country as part of the free baggage of NRI workers and passengers returning from abroad. Since these duty-free TV sets were about a third cheaper than those in India, there was a huge market for them. This dented the market of local manufacturers and the Consumer Electronics and Appliances Manufacturers Association (CEAMA) had been pressing the Government to curtail duty-free import.

Kerala and West Bengal have benefited most from the duty-free TV import. In Kerala, which has the largest number of NRIs in the Gulf countries, such TVs arrive mostly from Dubai and other West Asian cities. Every day, thousands of NRIs and frequent passengers arrive at Kerala’s three international airports. In West Bengal, duty-free TVs come from Bangkok (Thailand). CEAMA said of the total demand of eight million flat-panel TV sets a year, about 3-3.5 million were imported “mostly either through free baggage allowances or concessional rate of duties under FTAs (free trade agreements).” Because of this, the capacity utilisation of the domestic manufacturers was only around 70 per cent.

Anirudh V. Dhoot, President of CEAMA, claimed that the Union and State Governments lost around Rs 750 crore in revenues a year because of the free imports.

Suresh Khanna, General Secretary of CEAMA, said, the duty imposition was a highly welcome step and that the industry would benefit from the additional demand necessitated by the import curbs.

The demand for flat panels has been steadily increasing over the past several years as more and more people are switching from the conventional TVs. The TV manufacturers in CEAMA had together set up extra manufacturing facilities for Rs 1,500 crore to cater for the booming market.