The consumer electronics industry fears the government’s move to restrict non-essential imports might lead to increase in custom duties on premium televisions and appliances, which would increase prices.
Senior industry executives said products such as side-by-side refrigerators, large front-load washing machines, microwave ovens, dish washers, cloth dryers, appliances in built-in kitchens, premium air-conditioners and large screen televisions are mostly imported, and likely to be taxed more.
However, a significant portion of these products are imported from countries with which India has signed free trade agreements (FTA) like the ASEAN bloc countries such as Thailand, Vietnam and Malaysia. The industry says the government cannot impose any duties on them since it will be against the spirit of World Trade Organization.
“There could be an impact on pricing of premium products but the consumers for these products expect value and international technology and hence that should not dampen demand,” said Manish Sharma, CEO at Panasonic India and president of white goods industry body, CEAMA. Sharma said the move to curb non-essential imports is welcome since it should boost make in India. “The government should also lower duties on components,” he said.
The government last week said it is planning a slew of measures such as curbing non-necessary imports to stop the steep decline in rupee and trim the widening current account deficit. Imports of high-end electronics and gold are expected to be curbed significantly. While India imported Rs 32,230 crore of electronics goods in 2017-18, export was only Rs 4540 crore, according to ministry of commerce and industry data.
The industry feels the move will deter plans of companies like Samsung who had plans to import large screen televisions and further boost local production for the e-commerce focused brands who are mostly importing. Samsung did not respond to queries.
ET recently reported how brands like Xiaomi, Sony, BPL, TCL and Skyworth have started local production in India for televisions and appliances, and plans to further expand it at the raw material level.
Godrej Appliances business head Kamal Nandi said any move to curb component import will hit local manufacturing. “The focus should be on curbing completely built products. The market for such imported products is still quite small in India. For instance, the microwave market is around 8-9 lakh units sold per year or about Rs 800 crore,” he said.
BPL COO Manmohan Ganesh said the government needs to carve out the definition of essential and non-essential since a whole lot of appliances are essential in Indian households.― Gadgets Now