New Delhi: At a time when the consumer durables industry is battling high inflation and rising input costs, the government has slapped an anti-dumping duty on colour picture tubes, or CPTs, in a move that will increase the cost of manufacturing televisions and eventually make them pricier.
In a 24 July notification, the ministry of finance said 29-inch cathode ray colour picture tubes imported from countries such as Malaysia, Thailand, China and South Korea will attract an anti-dumping duty of more than 20%. Duties in a range of 10-15% will be levied on tubes of other sizes.
According to the government notification, the duty has been imposed to protect domestic CPT makers. But, the consumer durables industry expressed concern about the impact of the duty on demand for colour television sets. “The duty will have an adverse impact on the industry and the prices of colour television will go up substantially,” Ravinder Zutshi, deputy managing director at Samsung Electronics India Ltd, said. Any increase in sourcing cost will have a bearing on the price of television sets, he added.
Picture tubes account for about 45% of the total material cost of a television set. All leading television manufacturers such as Samsung, LG Electronics India Pvt. Ltd, Videocon Industries Ltd and MIRC Electronics Ltd, owner of the Onida brand, are importing the tubes.
According to industry estimates, the demand for colour TVs is projected at more than 15 million sets this year, far exceeding the supply by domestic manufacturers.
New technology introductions in the flat television segment as well as the consumer interest in slim TVs are fuelling demand.
However, the Indian CPT industry does not manufacture the 21-inch slim and ultra slim picture tubes or 29-inch slim picture tubes in the country. The capacity of domestic CPT manufacturers—Samtel Group and JCT Electronics Ltd—is only about 10 million units, leaving a shortfall of more than 5 million units that has to be met by imports.
The industry is also concerned about the increasing imports of television sets from Thailand that attract no customs duty because of a free trade agreement.
“The increase in the price of TV sets, as a consequence of anti-dumping duty on CPT, would make the cost of TV sets imported from Thailand cheaper,” said a spokesman for the Consumer Electronics and Appliances Manucturers Association.
“Thus, there is a distinct possibility that some of leading TV manufacturers would close down TV production units here and import TV sets from Thailand, thereby giving a severe setback to the domestic manufacturing sector,” the spokesman said.
Amitabh Tiwari, business group head for consumer durables at LG Electronics, said the 29-inch colour television segment has already been facing competition from liquid crystal display and plasma television sets.
“With the new duty, the category could see a degrowth,” he said.