After Nirmala Sitharaman presented her maiden Budget, the television companies seem to be unhappy with the government not reducing 5 percent import duty on open cell television panels in the Budget.
In order to make a profit, more television makers will cut down local manufacturing and explore options to import TVs at zero duty through the countries with which India has a free trade agreement (FTA), which would lead to net savings of around 5 percent, a report in Economic Times said.
Industry executives told ET that the government’s decision would push larger brands like LG and Panasonic too, to go shopping in abroad.
Companies like Sony have already started sourcing televisions from Thailand through FTA and is also considering Vietnam as a market for the same. Another television giant, Samsung had stopped local production of its televisions and started sourcing from Vietnam.
The report quoted Sunil Vachani, chairman at contract manufacturer at Dixon technologies. He said, “With the government not reducing the duty on open cell TV panels in the budget, imports of finished sets will get a boost through FTAs.”
Open cell panel accounts for 70 percent of the final cost for TVs.
Manish Sharma, president of Panasonic India, also told ET that if the duty was abolished, companies would have passed on the benefit to the consumers to revive sales.
The report also stated that TV imports have surged due to duty on open cell panels and have reduced to 5 percent―Deccan Herald