In a bid to curb import of household appliances and electronic products, primarily from China, the central government has hiked the basic customs duty on these items from midnight. This is likely to force firms to raise the prices of consumer durables as imported components will get costlier.
The news is a dampener ahead of the festive season. Household products like refrigerators, ACs, washing machines with a capacity of less than 10 kg and audio speakers will be hit the most. “This is bad news,” said Eric Braganza, president, Haier Appliances India. Kamal Nandi, business head and executive vice-president, Godrej Appliances, said it will impact all categories and ACs will take the biggest hit. “Indoor units of ACs are mostly imported. The GST rate for ACs is also highest. This is a double whammy,” he said.
B Thiagarajan, joint managing director, Blue Star, said, the firm was contemplating a round of price hikes in October due to surging cost of imports, thanks to the depreciating rupee. But now, it will have to look into its inventory level. “There could be a second round of price hikes in December-January,” he said.
“The price rise for compressors can come as a setback for the industry but, we are keeping a close track of the price impact,” said Manish Sharma, president and CEO, Panasonic India and president, Consumer Electronics and Appliances Manufacturers Association.
According to Vinit Agarwal, director of Aisen India that sells high-end speakers, it is not clear as to what extent these duty hikes will affect local manufacturing and speaker prices are set to go up soon as most of the high-end products come from China. Other products like compressors for ACs and refrigerators and top loading washing machines are mostly being imported from China, too.— Business Standard