- Import of finished TV sets from countries with which India has free trade agreement (FTA) leads to net savings of around 5 per cent
- Sony has started sourcing of televisions from Thailand through the FTA route and moved some locally produced models to Malaysia
- Sony is also considering Vietnam as a market for sourcing televisions through the FTA route
- Online-focused brands such as Kodak and Thomson are going to import through FTA than expanding local production
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 per cent import duty on open cell television panels in the budget.
In a recent report, Economic Times stated that import of finished TV sets from countries with which India has free trade agreement (FTA) leads to net savings of around 5 per cent.
Sony goes the import way
Sony has started sourcing of televisions from Thailand through the FTA route and moved some locally produced models to Malaysia, three senior industry executives said to the English Daily.
Sony, which focuses on premium and large screen models, is also considering Vietnam as a market for sourcing televisions through the FTA route, they said.
Other players to also make a move?
According to industry executives, 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.
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.
The continuous rise in imports
The electronics and IT ministry had last week informed Parliament that import of television surged 45 per cent 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 per cent and subsequently reduced to 5 per cent. Import duty on TV from non-FTA nations is 20 per cent.
