Economy

Picture-perfect: Domestic TV makers welcome removal of duty on ‘open cell’

Meenakshi Verma Ambwani New Delhi | Updated on September 19, 2019 Published on September 19, 2019

Say move will reduce companies’ reliance on import of CBUs from ASEAN countries

In a major relief to domestic TV manufacturers, the government has decided to remove import duty on ‘open cell’, a critical component to make LCD and LED TV panels.

The consumer durable industry had been urging the government to reduce this duty over the past three years as it was hurting manufacturers’ localisation efforts. Since there is no local manufacturing of open cell in the country, TV makers currently rely on import of open cells for which they were paying a duty of 5 per cent.

Cost benefits to customers

Though this government decision has come just before the festival season, it is unlikely the companies will be able to pass on the cost benefits to customers immediately. Most TV-makers buy raw materials two-three months in advance.

Also, production, distribution, firming up of pricing strategies and onboarding of inventories at stores for the festival season is done several weeks in advance.

Manish Sharma, President and CEO, Panasonic India and South Asia said: “Since open cells form a major share of the total manufacturing cost of TVs, the move will allow us to pass the benefits to the end consumer, which would be about 3-4 per cent reduction in price, thus providing the necessary thrust to the market.”

Avneet Singh Marwah, Director and CEO of Super Plastronics Pvt. Ltd said: “This has been a long-standing demand of the industry. The scrapping of import duty will help improve competitiveness of domestic TV manufacturers. It will also deter companies from relying on imports of CBUs (completely built units) from ASEAN countries under the FTA.”

Level playing field

Besides, this will also help create a level playing field for the industry which has been facing challenges from imported products being sold in the grey market, he added.

The industry players believe the government’s move will promote end-to-end TV manufacturing in the country and the development of a stronger component eco-system.

Kamal Nandi, President of the industry body, Consumer Electronics and Appliances Manufacturers Association (CEAMA) said: “CEAMA is committed to promoting indigenous manufacturing of TVs in the country and the amendment shall provide the necessary boost to the government’s initiative of ‘Make in India’ and shall also attract potential investors.”

He said that CEAMA will work closely with the government to formulate and facilitate phased manufacturing of TVs and end-to-end manufacturing of televisions in the country. “Implementation of the PMP (Phased Manufacturing Plan) will safeguard the interests of domestic manufacturers and will attract new investments in the sector,” Nandi stated.

Players also feel that this will also give a boost to the TV industry, which has witnessed flat growth in the past one year.

Younchul Park, Director-Home Entertainment at LG Electronics India, said: “This is a very positive development and it will certainly boost Make in India initiative. This is announced just ahead of festival season and it will have positive impact on panel TV sales.”

Sunil Nayyar, Managing Director, Sony India said:”Sony India has long been committed to the government’s Make in India initiative. This withdrawal of duty on open cell provides a strong boost to local manufacturing and will help us further enhance our efforts in this direction.”

The industry in the meantime has also been batting for a reduction in GST rate for TVs above 32 inches from 28 per cent to 18 per cent.

Meanwhile, the government also clarified that there is nil import duty on other key components like goods used in the manufacture of LCD and LED TV panels such as film, printed board assembly and cell made of glass board or substrate.

Published on September 19, 2019
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