It’s being seen as the ‘Unmake in India’ moment for the Indian television industry. TV makers say that jobs will be lost and local manufacturing will suffer after the government imposed an import duty on panels and its parts, even though there is no manufacturing of the technologically sophisticated components in the country. Some TV makers say they are better off importing fully built TVs instead of making them here, which would attract an import duty of 15% on panels and a further 10% on allied parts (both were nil).
“This is a massive setback to the ‘Make in India’ programme. Efforts for job creation in the electronics sector will be jeopardised,” Consumer Electronics and Appliances Manufacturers Association (CEAMA) has said in a petition to the government, seeking duty withdrawal, reported TOI.
The move has impacted companies including LG, Samsung, Panasonic and Sony, as well as contract makers such as Dixon and Super Plastronics. Retail prices are being increased by almost all the companies, as they weigh duty hike impact on costs.
CEAMA estimates sale at 1.7 crore TV sets in the country this fiscal, generating revenues of around Rs 25,000 crore, and giving direct employment to 11,000 people and indirectly to another 33,000.
While the government has imposed the duty as part of its efforts to boost local manufacturing, companies say the timing is not right, especially when the ecosystem for the critical and sophisticated parts is missing. Even the doubling of customs duty on fully built TVs (from 10% to 20%) — announced in December last year — will not have much of an impact as the duty on parts and panels has eroded the advantage of local manufacturing.
Manish Sharma, president of CEAMA, says local manufacturing will be impacted, while higher retail prices will hit demand. “It may not give the desired impetus to the vision of ‘Make in India’. Currently, TV parts such as open cell and other components are not manufactured in India. The cost of LED TVs will surge by 5- 6%, affecting the overall buying sentiment,” Sharma, who heads the operations of Panasonic in India, says to TOI.
Super Plastronics, which sold brands like Beltek, Crown and SVL earlier and now sells TVs under ‘Kodak’ branding — apart from contract manufacturing, says business has been hit badly. “Rather than giving benefits to the local industry, the new measure has ended up disrupting our operations. We may have to import now. We can’t hire any longer,” says Avneet Singh Marwah, who has factories in Noida, Jammu and Una (in Himachal Pradesh) and does business of around Rs 250 crore annually.
Sachin Rai, who heads the TV Business for Sony in India, agrees that margins in local manufacturing have shrunk. “We may have to increase prices soon, and this could be in the range of 6-7%.”
