Finance Minister, Nirmala Sitharaman on July 5, 2019 presented her maiden Budget in the Parliament. She committed that the Indian economy will grow to become a 3 trillion dollar economy in the current year. It is now the sixth largest in the world. She said in her speech, “Five years ago, it was at the 11th position. In Purchasing Power Parity terms, we are in fact, the 3rd largest economy already, only next to China and the USA.
While making other announcements, the Finance Minister decreased GST from 28% to 18% on consumer electronic items goods like refrigerators, washing machines, vacuum cleaners, juicers, mixers, storage water heaters, electric smoothing irons and televisions and computer monitors upto the size of 32 inches etc, primary cell, lithium ion battery, digital cameras, video games etc.
CEAMA welcomes initiatives to boost Make in India
“Consumer Electronics and Appliances Manufacturers Association (CEAMA), an apex body representing Consumer Electronics, Home Appliances and Mobile Industry, welcomed the amendments made by the Government in the custom duty structure for a number of items – components as well as finished goods – that will encourage domestic manufacture of multiple segments of the Appliance and Consumer Electronics market.
Import of Split Air Conditioners (Indoor and Outdoor units) will each attract Customs Duty of 20%. While Outdoor units has by and large been indigenised, indoor units has yet to achieve the same degree of localisation, which will now be boosted. Imposition of Customs Duty on a number of emerging and high growth product categories such as CCTV and IPTV cameras and DVR/NVR which are largely imported will attract interest from domestic manufacturers as the import duty imposed (20%) gives them a level of protection. Loudspeakers made in India and under threat from imports will get a protection with import duty going up by 5% to 15%). Waiver of duty on capital goods for manufacture of chargers, adaptors, camera modules (for cellular mobile phones) and machinery to make Open Cells (for television sets) and Populated Printed Circuit Boards used widely in the industry, will encourage suppliers to set up manufacturing in India.
CEAMA has been making efforts to improve the domestic manufacturing eco-system of appliances and consumer electronics and a number of the announcements were recommended by CEAMA.
Kamal Nandi, President, CEAMA and Business Head & EVP, Godrej Appliances, said, “CEAMA is committed to promote indigenous manufacturing of appliances and consumer electronics in the country and the announcements in this budget shall provide the necessary boost to the Government’s initiative of ‘Make in India’. That said, we were hopeful of concrete measures that would accelerate demand. CEAMA will continue to work closely with government to formulate more policies to develop the appliance and consumer electronics industry in India.”
Governments continued attention towards skilling especially new age skill sets such as AI, Robotics will help improve the quality and quantity of skilled labour – critical to industrial growth. Rural electrification which aims to touch every household by March 2022 coupled with infrastructural push via Gram Sadak Yojana and the rural support schemes will serve as a catalyst in improving the demand for consumer electronics and appliances. Category penetration levels should therefore improve faster.
Electronics hardware production in the country increased from Rs 1.90 trillion (US$ 31.13 billion) in FY14 to Rs 3.88 trillion (US$ 60.13 billion) in FY18. Demand for electronics hardware in India is expected to reach US$ 400 billion by FY24. The above initiatives will surely serve as a major growth drivers in expansion of the segment.”
Manish Sharma, President and CEO, Panasonic India and South Asia.
“The Union Budget 2019 is aimed at strengthening the fundamentals i.e. India’s rural infrastructure, connectivity, education, skilling, electric mobility and the economy at large. The Government of India put forth multiple initiatives to kick-start the growth of MSMEs and start-ups in the country and also outlined various changes in custom duties, which we believe will boost India’s economic growth.
From a consumer electronics industry perspective, Government of India’s move to increase basic customs duty (BCD) on indoor and outdoor unit of split system air conditioners from 10% to 20% and CCTV cameras and IP cameras from 15% to 20% is a positive step forward. This indicates Government’s focus on boosting manufacturing in the country. Saying that, we were also expecting reduction exemption of BCD on open cells ( TV ) to give the necessary thrust to the market and reduction of GST rates for TVs above 32 inches to 18% and efficient products like Air Conditioners and Refrigerators with a rating of 4 stars and above, bringing them under the 12% slab to drive demand and consumption, while still fulfilling aspirations of consumers and small businesses.
The Government also laid emphasis on improving the electric mobility ecosystem in the country by allocating INR 10,000 crore for the FAME II scheme and relaxing the duty on capital goods used for manufacturing of lithium ion cells. Further, the additional income tax deduction of INR 1.5 lakh on interest on loan for electric vehicles, is a huge impetus for consumers to consider electric vehicles as a viable alternative.
We also applaud the Government of India’s move to continue the funding for fundamentally sound NBFC’s from mutual funds and banks, which will allow the end consumer to get easy finances and thus improve their purchasing power.”—TVJ Bureau