The Cost Of TV Might Spike Up From October As The Sop For Panel Duty Ends
The prices of televisions might hike up October onwards as the import duty of 5% on the concessions of the open-cell panel that has been offered last year will end at the end of this month. The television industry is under quite a bit of pressure as the prices for the fully-built panels which is a key component in making a TV has shot up by 50%. For instance, the cost of a 32-inch panel will go up to $60 from the previous $34.
It is already learned from the electronics and IT ministry that it is very much in favor of extending the concession of import duty that helped in fetching investments back into the manufacturing of TV that also included prompting Samsung, a South Korean major to shifty its production base from Vietnam to India. Nevertheless, a final decision would be taken by the ministry of finance which has already seized of the matter according to sources.
The TV companies spoke to media outlets and said that they have to pass on with no other option. They are going to bear the additional costs if the duty concessions are not extended beyond the period of September 30. Brands like Sansui, Thompson, Panasonic, and LG are included in it that says that the TV prices will hike up by around 4% and for a 32-inch television; it is going to be a minimum of Rs. 600 and for a 42-inch it is going to be Rs. 1,200-1,500 and for the larger screen ones, it is going to be even higher.
Various contract manufactures like the Jaina Group and the Dixon Technologies has said that the move is going to be counter-productive and will make the cost uncompetitive for Indian manufacturers. The contribution of the open cell panels is 60% of the television cost and it is said by the companies that the government should look for a phased-manufacturing program (PMP) instead of imposing an import duty.
The CEO of Panasonic India, Manish Sharma has said that under PMP there will be milestones towards local value addition. A new duty structure of 5% can be introduced annually starting from the third year onwards in case, one is unable to localize by then. The matter is taken up with the government by the business chamber FICCI, industry body CEAMA according to Sharma.
The issue related to open cell localization is a very tricky one as it has got the capital-intensive fab that is an important ingredient for making panels are not made here. According to CEAMA, a few years are required to attract fab manufacturing into India and also added that the factories set up by TCL, in the country have done very low-value addition.
The companies are left with no option and have to pass on the prices to the consumers. The duty for concessions has to be extended by the government.
I am Darryl Broadhurst and i give investors an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicizes valuable information for shareholder community.
