The consumer durables industry, faced with the twin challenges of sluggish demand and rising costs, got a booster shot from Finance Minister Arun Jaitley on Wednesday when he extended the excise duty relief until December 31.
This was one of the key demands of the industry.
Industry players said consumer goods and home appliance prices are likely to remain at the same levels.
Prices had become marginally cheaper when excise duty was cut in February from 12 to 10 per cent. Amid rising input costs, companies were expected to revise prices after June 30, when the duty concession was set to expire.
However, the price hike move will now be held off, they said.
Shantanu Dasgupta, Vice-President, Corporate Affairs & Strategy, Whirlpool India, said the extension of excise relief will help keep consumer sentiment buoyant.
The industry has been witnessing a rise in demand for seasonal products, but it still faced challenges of weak demand for other categories, he added. The industry is still looking towards the new Government for sops to help promote India as a manufacturing hub.
Policy changesWith the new energy norms kicking in from the beginning of this year, it has urged the Government to cut excise duty, especially on 5-star rated products such as air-conditioners and refrigerators, to 5 per cent.
“We still hope the Government will make policy changes that encourage manufacturing of higher energy-saving products,” said Kamal Nandi, Business Head & EVP, Godrej Appliances.
Besides reforms such as introduction of goods and services tax (GST), the Consumer Electronics and Appliances Manufacturer Association (CEAMA) has been pushing for policy interventions to encourage local manufacturing of products such as flat panels and microwaves.
It is also seeking removal of inverted duty structure driven by Free Trade Agreements. “We hope that the Government will consider our recommendations on implementation of GST and intervene on the inverted duty structure,” said Manish Sharma, VP, CEAMA, and MD of Panasonic India.