Three-fourths of light emitting diode (LED) bulbs sold in the country's Rs 10, 000 crore market were found non-compliant with the government's consumer safety standards, market research firm Nielsen said in a survey on Monday. The report, based on a study of 200 electrical retail outlets across major cities like Mumbai, Hyderabad, Ahmedabad and New Delhi in July, found the products to be spurious and riskier, with the highest number of violations in the national capital.
"The spurious and non-branded LED products are a serious threat to not just the organised and compliant market players but also to the government's key programs like Make in India," the report said. In August, the Bureau of Indian Standards (BIS) had ordered LED makers to register their products with BIS for safety checks, in a market where smuggling of Chinese products is rampant. India is tightening quality controls for consumer and capital goods, officials say, a move that follows calls to curb cheap imports from China amid diplomatic tensions between the two countries.
"The spurious products also impact government's tax revenue collections, defeat investment objectives and go against the 'ease of doing business' philosophy," it said. The findings showed that 48 per cent of LED bulb brands had no mention of manufacturer's address and 31 per cent did not have a manufacturer's name. These spurious products pose a serious safety hazard for consumers besides causing significant loss in tax revenues for the government as they are illegally manufactured and sold, said Electric Lamp and Component Manufacturers Association (ELCOMA).
According to the association, the total LED market in India is valued around Rs 10,000 crore and LED bulbs and downlighters constitute nearly half of the overall LED market. "It threatens fair competition in the LED lighting market, especially for those companies that are compliant to all mandatory consumer safety standards,'' said ELCOMA President Rakesh Zutshi. He also added that it was unlikely that the manufacturers of these spurious LED bulbs and tubelights pay any GST to the government, causing loss to the exchequer.
Given the governments push towards adoption of LEDs and their general consumer popularity, LED lighting will constitute a majority share of the total lighting market in the next few years. With this scenario, it is important for the government to act against these spurious and nonbranded products for safeguard-ing consumer safety and protecting their revenues against these companies, Philips Lighting India Vice Chairman and MD Sumit Joshi said. LED bulbs and tubelights are also being popularized by the government through the public sector Energy Efficiency Services Ltd (EESL) which procures them in bulk from manufacturers.
This enables EESL to get these products at a lower price since economies of scale kick in. Accoridng to official figures over 25.5 crore LED bulbs, over 30.6 lakh LED tubelights and around 11.5 lakh energy efficient fans have been sold in the country under the UJALA scheme. According to the government, this is expected to lead to an annual energy savings of over 3,340 crore kWh and result in avoidance of over 6,725 MW of peak demand. EESL claims through the scheme the estimated cumulative cost reduction in bills of consumers annually is over Rs 13,346 crore and is leading to reduction of approximately 2.7 crore tonnes of CO2 every year.