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Monday, August 03, 2020

Explained: Will the import restrictions on televisions push up prices?

TV Import Restrictions: The move is especially expected to wean India off its import dependence on China for various electronic goods. The Indian Express takes a look at the decision and what this will mean for consumers.

Written by Prabha Raghavan , Edited by Explained Desk | New Delhi | Updated: August 3, 2020 2:26:58 pm
tv import restrictions, tv import restrictions in india, colour tv import restrictions, television import restrictions, india restricts television imports, tv import ban india, tv import restrictions in india, television import restrictions in india, tv sets manufacturing in india, tv import restriction impact on prices, colour tv import restrictions in india, tv import restrictions news India’s television industry is pegged at around billion, of which 36 per cent is catered to by South East Asian countries and China, according to data from the commerce ministry. (SeongJoon Cho/Bloomberg)

The government has imposed fresh restrictions on the imports of various types of colour television sets, including LCDs, as part of its ‘Atmanirbhar Bharat’ campaign. The move is especially expected to wean India off its import dependence on China for various electronic goods. The Indian Express takes a look at the decision and what this will mean for consumers:

How dependent is India on imports for television sets?

India’s television industry is pegged at around $2 billion, of which, 36 per cent is catered to by South East Asian countries and China, according to data from the commerce ministry.

Read this story in Tamil, Bangla, Malayalam

However, when it comes to commonly bought foreign TV brands, the companies selling them, including Samsung, Xiaomi, OnePlus, Sony and LG, have already either been manufacturing the sets or their components in India or have announced plans to make them here.

For instance, Tokyo-headquartered Sony has already been manufacturing its Bravia sets in India. Chinese firm Xiaomi has been locally manufacturing its Mi TVs since 2018, and last year announced it would be scaling up production by bringing in component manufacturers as well.

“A number of companies like LG and Samsung already have manufacturing capabilities here. There are also original equipment manufacturers for a number of these brands. We have the capacity,” added an industry executive on condition of anonymity. “Gradually, we are expanding this capacity.”

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What does the government’s latest move mean?

The Directorate General of Foreign Trade on Thursday imposed restrictions on imports of nine categories of coloured TV sets. This does not mean that imports have been banned. What it does mean is that importers will now have to seek a no-objection certificate from the DGFT before they can bring these products into the country.

However, the move has been brought in as a non-duty action in the face of an existing Free Trade Agreement (FTA) that India has with countries from the Association of South-East Asian Nations (ASEAN). The agreement does allow these countries to export their products here at favourable or zero-duty rates and does not allow India to increase these duties.

There has also been reported concern that China has been routing its products to India through ASEAN countries.

In 2019-20, India imported $780.84 million of the TVs that have been placed in the restricted category. ASEAN country Vietnam contributed around $428 million of these imports, while China catered to roughly $292 million.

Will your TV become more expensive now?

It is still unclear how the restrictions are going to play out for high-end TV products that are currently not manufactured in the country at all, as this is a non-duty measure.

However, given that the restrictions are only on finished goods and not on the components used to make them, some industry experts feel that the move could push India towards self-reliance, starting with the assembly of the final product here.

Explained: Why China trade ban will hurt India more

“I don’t think this should increase the prices of televisions for our citizens. In the first phase, it would mean that a lot of components would be imported and the assembly will begin to happen in India at the CKD or SKD level,” said Vinod Sharma, managing director of Deki Electronics and the chair of the Confederation of Indian Industry’s (CII) National Committee of Electronics.

“But we should actually aim at manufacturing going forward. This is a signal not only to China, but also to ourselves to become a global manufacturing hub at least for our demands in India, if not for our exports,” he added.

For popular brands bought in the country, the impact of the government’s latest move is unlikely to lead to a surge in prices for the end user, according to others.

How is India increasing its self-reliance in TVs? What other consumer electronics are in focus?

During a virtual conference on July 14, commerce minister Piyush Goyal had flagged televisions and air conditioners as areas that the government was targeting to build self-reliance, stating that there was “no rocket science here”.

The issue of India’s dependence on imports for air conditioners had previously also been raised by Prime Minister Narendra Modi, who had said over 30 per cent of the country’s demand was being met through imports.

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To boost India’s capabilities in televisions, the government has exempted duties on TV components like open cells, chips on films and printed circuit boards assembly (PCBA). A Phased Manufacturing Programme (PMP) for televisions is underway, according to the ministry.

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