Budget 2023: TV prices to become cheaper post reduction in open cell custom duty

To boost domestic manufacturing and enhance domestic value addition, Finance Minister Nirmala Sitharaman in Budget 2023 has proposed to reduce the basic customs duty on parts of open cells of TV panels to 2.5 per cent. This move by government of India to reduce customs duty on open cell to 2.5% from the existing 5% will bring down the television prices by up to Rs 3,000 for larger screens and between Rs 300-Rs 500 for smaller screens.

“Prices for LED TVs are expected to fall by 1% to 1.5%  per cent and the benefits of the same shall be passed on to the customers. This decision is a much-awaited one. The ongoing 'Make in India' campaign, which includes lower import duties on 'parts/raw materials' used in electronics, camera lenses, and TV panels should help increase direct and indirect job creation,” said Arjun Bajaj, Director - Videotex International.

For instance, if the benefit is passed on to the consumer, a 43-inch LED TV, for instance, which was earlier retailing around Rs 25,000, might now cost Rs 24,500.

Sourced from China, Korea and Taiwan, open cells are important part of TV manufacturing and comprise anywhere between 55%-70% of the overall cost of the television. Predominantly imported from China, TV manufacturers assemble other components over the open cell before packaging and shipped it to the end consumer.

The industry is upbeat about the reduction in customs duty on open cell. Avneet Singh Marwah, Director and CEO, Super Plastronics Pvt Ltd, a Kodak brand licensee, said: “We welcome the move of government to reduce the custom duty on open cell to 2.5%. This will really help the domestic TV manufacturing industry to scale up and compete with the global brands. This decision was awaited for a long time and this time, I am happy that the government has really considered our recommendations.”

While some of the industry players are expecting the benefit to be passed to end consumer sometime between April to June quarter, it will completely depend on the brands and manufacturers on how quickly they will pass on the benefit depending on the inventory status and material in pipeline.

Boost for Indian TV industry

Sunil Nayyar, Managing Director of Sony India said, “The newly announced reduction in Basic Customs Duty for several television component imports is a big boost for the television industry. We welcome this budget in its entirety and we are optimistic of our future business plans in India.”

Other than boosting the domestic television industry, it will act as an impetus for export from India as well. “The move to reduce the custom duty on open cells of TV panels cut to 2.5 per cent, thus making smart TV’s an accessible commodity. This move will not only help strengthen the ‘Make In India movement’ but will also empower companies like us who want to ‘Make in India’ for the world and compete with the volatile international panel market,” said Saket Gaurav, Chairman and Managing Director of Elista and TeknoDome.

No change in GST slab

Last year TV sales witnessed stagnation in the high-volume mass segments due to prevailing economic conditions and low consumer sentiment among the middle class, apart from continued cost impact on the industry due to commodity, currency, and regulatory norms. Given this context, TV industry was hopeful of lower GST slabs for smaller size TVs to become more affordable. However, the GST slabs remain unchanged at 18% for up to 32 inches and 28% for above 32-inch models.

Also Read: Union Budget 2023: Made-in-India smartphones, TVs to get cheaper