The OEM for TV sets sector saw a 59 percent increase in 2019 over the last year. While all other manufacturers managed to run their lines on the same levels as last year, it was Dixon Technologies, which after having doubled production in 2019, is set for higher numbers in 2020.
The Indian OEM market in 2019 for TV sets is estimated at 4.5 million sets, a whopping 58.5 percent increase over 2019, as against a 22 percent increase in 2018 over 2017, and a 12 percent in 2017 over 2016. The main contributor is Dixon, manufacturing about 0.18 million sets for Xiaomi, about 1.5 lakh per month. The slot vacated by Videocon in 2019, was filled by other brands, that is, not LG, Samsung or Sony, as was the drop in sales of Sony and Panasonic. Apart from Xiaomi, TCL is another brand which jumped ranks in 2019.
In January 2020, Dixon entered into an agreement with Samsung India for manufacturing LED TVs at its facility located at Tirupati, Andhra Pradesh. Additionally, the company is also looking for other TV OEMs in India. Samsung is also figuring out whether the company can restart the production of the television line at its Chennai plant. The plant was closed in October 2018 after the government had imposed a duty on open-cell television panels, which has been revoked.
Chinese smartphone manufacturer, OnePlus is also looking to start manufacturing its range of televisions in India, starting the first quarter of 2020. The company plans to leverage its position in the local market, and turn it into a production hub for global supplies. The company currently plans to assemble smart TVs in India at a partner’s facility.
India has set its sight on creating a USD 400-billion manufacturing ecosystem by 2025, and has notified a new policy to boost manufacturing activities.
In line with this, while the electronics exporters have been expecting incentives in the transition from the Merchandise Exports from India Scheme (MEIS) to the new scheme, Remission of Duties and Taxes on Export Product (RoDTEP), effective April 2020, thereby creating a fully automated route for Input Tax Credit (ITC) in the GST and an additional export credit of up to Rs 68,000 crores, which includes electronics as a category, the DGFT recently announced a drop to 2 percent from 4 percent in export incentives for the electronics manufacturing industry.
This has led to uncertainty, as it will impact the existing investments as well as planned investments, much of which is linked to export orders. This is when MAIT had proposed 8–10 percent support to offset India disability to attract global manufacturing into the country. There is no denying that India has strong competition from manufacturing hubs as Vietnam and China, with their attractive and stable export-oriented policies, coupled with better infrastructure, logistics network, and laboratories for global standard testing.
The powers-that-be must be very clear that we are in a make-or-break situation and the applecart could very well just tumble.