The domestic electronics hardware manufacturing sector faces lack of a level playing field vis-à-vis competing nations. Around 30 percent of TVs are imported from various countries and about 80-85 percent TV components are imported from countries like China, South Korea, and Vietnam. The sector suffers disability on account of lack of adequate infrastructure, domestic supply chain and logistics; high cost of finance; inadequate availability of quality power; limited design capabilities and focus on R&D by the industry; and inadequacies in skill development.
While the coronavirus pandemic taught nations how over-dependence on imports can increase risk at challenging times, India has now pledged to become self-reliant and boost local manufacturing under the Make in India initiative. In line with this, the Directorate General of Foreign Trade (DGFT) in a July 30 notification said that the import of color television sets has been moved to the restricted from the free category. Any company that wants to import a color TV set has to seek a special license from DGFT for this purpose.
The restrictions imposed by the center on the import of finished TV sets that have screen size larger than 14-inch is primarily aimed at controlling imports from Vietnam and China. While manufacturers will still have options like securing licenses for import, it will help the government restrict imports from China.
Amendment in import policy of items under Exim Code 8528 72 of Chapter 85 of ITC (HS), 2017, Schedule – I (Import Policy)
The government has been working in a phased manner in the direction of restricting TV imports for the last 3 years. The idea is that in the first stage, complete TV import will be restricted. At a later stage, import of components like LED panels and open-cell for LED screens will also be restricted to encourage manufacturing these products locally. This move will also curb illegal trade in the industry.
Homegrown TV manufacturers see it as a good first step toward propelling local TV manufacturing in the country. On the contrary, the restriction is expected to lead to further disruption in business activity and crunch in the supply of components which have taken a toll on TV manufacturers. Chinese brands will be the worst hit companies as a whopping rise in prices of key components besides a ban on the import of finished sets is anticipated.
The government has been stepping up to bring investments from abroad in the last few years. India imported color TVs worth Rs 7120 crore in FY19, which fell 22.56 percent to Rs 5514 crore in FY20, according to the Department of Commerce. The center aims at increasing job opportunities and self-reliance by manufacturing everything which is possible to make in India. Various state governments are also in conversation with foreign firms and trying to lure them to invest in their respective states. – TVJ Bureau