By Srabani Sen
Prices of LED lights will fall by about 10-12 per cent due to the budgetary proposal to reduce excise duty on LEDs from 10 per cent to 5 per cent, and the full exemption on the special CVD of 4 per cent, say industry analysts. Last year, government had reduced central excise duty on LED lights from 8 to 4 per cent. This year, it reduced duties on the key component of LED lighting products—LEDs, which are currently being imported by all manufacturers in India.
“Reduction in excise duty on LEDs and full exemption on the special CVD will definitely lower the MRP of LED lighting products and, hence, increase the acceptability of LED lights, the sales of which have still not picked up in India as it has in other countries. Any drop in raw material costs will definitely reduce the MRP. In fact, we are pressing for 0 per cent excise for the next five years, so that LED lights become acceptable in India; then the government can decide to introduce excise duty, in phases,” says Avnish Jauhari, business head, lighting, MIRC Electronics Ltd.
Globally, although the price of LED lights are falling by about 25 per cent every year due to technological innovations and growth in volume of sales, in India, the situation is different. Here, due to very high price of LED lighting products, there is lower consumer acceptance and, hence, low sales volumes. In such a situation, the price of LED lighting products going down by 10-12 per cent will definitely help in penetrating the Indian market.
“The real impact of the reduced excise duty on LEDs and the exemption on the special CVD will be felt by the third or fourth quarter of the financial year when price of LEDs is expected to fall drastically by about 20 per cent,” says Avnish Jauhari.
Besides marketing their products, Indian manufacturers are also adopting several initiatives to increase awareness among buyers about using LED lights for industrial as well as commercial purposes. These awareness initiatives aim to motivate common man to use LED products despite the high cost, as they save power, have a long life and low maintenance requirements. These efforts, in fact, are gradually resulting in companies and even individuals opting for LED lighting systems. “Prices will inevitably fall as demand rises, and moreover, the future belongs to LED lighting,” says SC Joneja, director, AMKA Lighting.
Many companies have started using 10 cm and even 15 cm wafer substrates instead of the traditional 5 cm versions. The larger the substrate, the lower the cost of production. As the industry moves to larger wafer sizes, LED manufacturers can reduce product costs and expand their manufacturing capacity even further.
Researchers and manufacturers across the globe are also exploring other techniques to lower the production cost of LEDs, and hence, the price of LED products. One such method was announced by Cambridge University, which claims to have found a simpler and cheaper way of making gallium nitride (GaN)—a semiconductor used for making LEDs. This will enable production of LEDs at one-tenth of the current costs, by using 15 cm silicon wafers instead of 5 cm sapphire wafers.