The Centre’s move to scrap the import duty on open cell panel, which claims 65-70% of the television production cost, will be valid for one year after which it would be taxed again unless the assembly begins locally, three senior industry executives said.
India imports finished open cell panels, which are used in making the LED panels, since there is no panel manufacturing facility in the country.
The finance ministry issued the duty-cut notification late Tuesday. The government wants to start local assembly of open cell panels by September 30, 2020, allowing the duty exemption thereafter only on the yet-to-be finished or basic open cell panels, while the finished open cell panels will be back to the 5% levy.
This has fuelled speculation over whether Samsung, the country’s largest television brand, would soon resume TV manufacturing in India since no TV maker has the expertise to assemble open cell display. “No decision has been made,” a Samsung India spokesperson told ET when asked about resuming the operations.
None of the specialised display panel makers like China’s Boe, Taiwan’s AU Optronics and Innolux Corporation, and Korea’s LG Display and Samsung Display Company is in India, the executives said.
Samsung had shut down the local TV assembly line in Chennai last October and begun import of finished products using the free-trade agreement (FTA) route from Vietnam to avoid the 5% levy on open cell panels.
Samsung India officials reached out to the ministries of finance and electronics on Wednesday, seeking to extend the September 2020 deadline, the executives said. The duty cut has built pressure on the Korean chaebol to resume TV assembly in India. The government move is being seen as a bid to wipe out the blotch that the Chennai plant shutdown left on the Make-in-India programme.
A senior industry executive said the duty cut will boost the TV manufacturing ecosystem but will be effective only after open cell display assembly begins in India. “TV manufacturers don’t have the capability of display assembly. It is a small value addition of 3-4%. We will request the government to extend the September 2020 deadline further, giving them time to set shop here,” he said.
The notification also scrapped duty on printed circuit board assembly, cell (glass board/substrate) and chip on film. The exemption on these components of open cell panel will continue beyond next September, government officials said. Gadgets Now