ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

KOLKATA: More television makers will cut down local manufacturing and instead explore options to import TVs at zero duty through the FTA route with the government not reducing 5% import duty on open cell television panels in the budget, industry executives said.Import of finished TV sets from countries with which India has free trade agreement (FTA) leads to net savings of around 5%, they said. Sony has started sourcing of televisions from Thailand through the FTA route and moved some locally produced models to Malaysia, three senior industry executives.The Japanese company, which focuses on premium and large screen models, is also considering Vietnam as a market for sourcing televisions through the FTA route, they said.India’s largest television maker Samsung had completely stopped local production of TV last year and started sourcing from Vietnam.Industry executives said the decision not to cut import duty on open cell panel may force other large brands such as LG and Panasonic , too, to explore such options. Even online-focused brands such as Kodak and Thomson are going to import through FTA than expanding local production.Avneet Singh Marwah, CEO at Super Plastronics, maker of Thomson and Kodak televisions, said the company will now consider imports from FTA nations than expanding local production. “It is a cost disadvantage to produce in India,” he said.Open cell panel is the most critical component of a TV, accounting for 70% of the final cost, industry executives said. “With the government not reducing duty on open cell TV panels in the budget, imports of finished sets will get a boost through FTAs,” said Sunil Vachani, chairman at contract manufacturer Dixon Technologies. “This will impact local production and investment since all manufacturers were waiting for the budget.”According to industry insiders, this is a rare case of inverted duty structure since there is no production of TV panels in India and the sole project by Vedanta has also been shelved. With the proposed Regional Comprehensive Economic Partnership (RCEP) FTA likely to be signed later this year, imports of TV sets are set to surge and local production will take a hit, they said.Panasonic India president Manish Sharma said if the duty was abolished, companies would have passed on the benefit to consumers to revive sales when the industry is already facing a tough time with the cricket world cup also not boosting sales.An email sent by ET to Sony India remained unanswered till press time on Sunday.The Indian TV market is worth around Rs 22,000 crore.The electronics and IT ministry had last week informed Parliament that import of television surged 45% to Rs 7,224 crore in 2018-19 from countries like China, Vietnam, Malaysia, Hong Kong and Taiwan.Imports from Vietnam alone soared to Rs 2,317 crore in FY19 from Rs 62 crore in the year before.TV imports have surged primarily due to duty on open cell panels, which was initially 10% and subsequently reduced to 5%. Import duty on TV from non-FTA nations is 20%.