New Delhi: Television prices will rise as the government increased customs duty on imported panels and other parts used in its manufacturing, however, makers expect the move to help the industry in long run.
Terming the customs duty increase as a "logical step", TV manufacturers have welcomed the government's move saying it would help domestic manufacturing industry.
While, presenting budget for FY 2018-19, Finance Minister Arun Jaitley proposed to double customs duty on imported panels to 15 per cent from existing 7.5 per cent to encourage local manufacturing.
The government has also increased the customs duty on parts of LCD/LED/OLED TVs to 15 per cent from existing 10 per cent to boost domestic manufacturing.
Over the price increase, the Consumer Electronics and Appliances Manufacturers Association (CEAMA) said it will be "momentary" and have temporary impact.
"I believe that this is a very logical step in terms of increasing configuration in the country... It would have a momentary impact but eventually it would not last more than two months," CEAMA president Manish Sharma told PTI.
The move will not only help the domestic players but also push them to develop capacities for manufacturing components locally.
"I am sure that this would be very positively taken by the most of the manufacturers. There might be case of momentary hike in cost, till the time people become ready for open set manufacturing," Sharma said.
According to Sharma, it will also encourage "reverse integration" and "increase the value addition in the country".
"This would encourage to open set assembly in India and the price benefits would be passed on to the consumers," Sharma said, adding that most of the companies here are doing open set assembling and some are importing panels.
Homegrown consumer electronic firm Videocon said the move would encourage domestic manufacturing and would help the companies engaged in the field of electronics manufacturing.
"Increase in the customs duty has strengthened the 'Make in India' program which has received a massive boost and will help enormously for the manufacturing sector especially in the field of electronics manufacturing," said Videocon chief manufacturing officer Abhijit Kotnis.
Expressing similarly, LG India head of corporate marketing Amit Gujral said: "It is good to see that there has been a significant push to boost Make in India initiative".
According to Intex Technologies, the move will help domestic players and encourage other makers to develop capacities for local manufacturing of components.
"This is a big thumbs up to domestic players like Intex, which have been developing domestic capacities since long in electronics manufacturing.
"The move will push for developing capacities for local manufacturing of components," said Intex Technologies director and CFO Rajeev Jain.
Similarly, AKAI said domestic manufacturing will be further fueled and will help the overall health of the economy.
"The increase in custom duty for some parts of TVs is a clear indication to promote the bid towards 'Make in India' initiative. The domestic manufacturing will be further fueled with this move and will help overall health of the economy," said AKAI India director Anurag Sharma.
However, Micromax does not consent with the upbeat views of other industry members and feels that this move will "adversely" affect the manufacturing ecosystem.
"The increase in customs duty on the certain parts of TV might affect the manufacturing ecosystem adversely," Micromax co-founder Rajesh Aggarwal said.
In 2017, the Indian television market was estimated to be around of 15 million units, in which less than 15 per cent high end LED/OLED and 4K sets were imported.
The average sales price of a TV unit in India is around Rs 18,000 and the total market is estimated to be around Rs 27,000 crore.
