In a move to promote domestic manufacturing, the government has decided to reduce customs duty on ‘open cell’ used in the manufacturing of LCD and LED television panels to 5 per cent from the current 10 per cent.

This move is expected to bring some relief to industry players, who had earlier urged the government to reverse the custom duty hike on open cell and other components used in making TV panels.

Manish Sharma, President and CEO, Panasonic India and South-Asia, said, “This brings back the emphasis on government’s Make in India vision which will drive the momentum and develop new capacities for TVs within India. Going forward, the consumer electronics industry can look forward to a developed manufacturing ecosystem whilst creating job opportunities.”

The government had hiked customs duty on open cell and other components used in making LED and LCD TV panels to 10 per cent in February. This had led TV players to look at increasing prices of new models by 6-7 per cent to offset the increase in costs. The industry had also expressed concerns about adverse impact on demand for LED TVs. Now they are likely to re-look at their future pricing strategy.

Nidhi Markanday, Director, Intex Technologies, said, “We welcome the move as the government has taken corrective measure on its budget announcement. This will bring back focus on Make in India and correct the anomalies of inverted duty structure that has been hurting domestic manufacturing capacity building and thereby our competitiveness. It will encourage localisation, setting up of a components ecosystem in India and will give a boost to plans for local manufacturing. In lieu of the reduction in duty and our focus on consumers, we will re-visit our pricing strategy for the upcoming LED TV models as we aim to offer our products at the best affordable price.”

MS Mani, Partner, Deloitte India added, “The customs duty of 5 per cent on open cells used in the manufacturing of LCD panels is lower than other items mentioned in Chapter 8529. This could ostensibly be to encourage manufacturing of LCD panels in India, which are taxed at 10 percent.”