The consumer durables industry expects finance minister Nirmala Sitharaman to announce incentives in budget 2020 to aid the sector, drive consumption and strengthen the government's Make in India story. The industry is seeking incentives for local manufacturers, reduction in taxes on eco-friendly and energy-efficient products and waiver of customs duty on imported inputs to make components.
Here are some of the key demands of the consumer durables industry from budget 2020:
1. Announce more exemptions on the lines of last year's cut in basic customs duty on open cells from 5% to 0%. This move helped companies pass on the benefits to the customers by decreasing TV prices.
2. Reduce basic customs duty on inputs used in producing key components such as motors and printed circuit board (PCB) which currently vary from 7.5%-10%. Components such as motors and PCB are further used for manufacturing air conditioners, refrigerators and washing machines etc. Customs duty reduction on these (components) will reduce input cost, enabling domestic manufacturers become more competitive.
3. Announce more positive policies for the consumer appliance industry on account of a flat growth over the last two years. This will help aid and drive growth in the sector.
4. Reduce GST on TV and refrigerators as it will help lower costs for the customers and push further penetration of these products in the consumer market especially in rural India.
5. More efforts under National Policy on Electronics (NPE) to help boost the government's Make in India vision and make India a hub for electronics manufacturing.
6. Incentivise domestic businesses and create an ecosystem for local manufacturing to improve India's exports.
7. Establish favourable trade agreements with consumption economies to boost exports.
FULL COVERAGE:Union Budget 2020
Meanwhile, the Consumer Electronics and Appliances Manufacturers Association (CEAMA) has also urged the government to offer incentives for manufacturers to produce energy-efficient products which will be in line with the government's focus on sustainability in a pre-budget memorandum. "Lowering the GST tax slabs for eco-friendly and energy-efficient products like air conditioners (4-star, 5-star models) and refrigerators (direct cool and frost-free) to 12 per cent will drive demand and increase the adoption of sustainable appliances by Indian consumers," CEAMA President Kamal Nandi told PTI.
Finance Minister Nirmala Sitharaman will present the Budget for the financial year 2020-21 on February 1. According to CEAMA, the industry has largely been stagnant this year and with increased customs duties, global economic changes and fluctuations in currency and commodity, the demand levels for next year are difficult to predict.
Indian component suppliers are facing difficulty in competing with cheap Chinese imports, it said.
Also read: Budget 2020: What can auto sector expect?