New Delhi: This festive season, get ready to pay more for a new television with a screen bigger than 32 inches. The reason: the increase in price of TV panels due to a supply shortage, following a sudden rise in global demand. Panels account for about 70% of the cost of a TV.
This, coupled with a weaker rupee that drives up import costs, will force companies to increase the price for TV sets beyond 32 inches, TV manufacturers said. Still, they are likely to absorb part of the increase in raw material costs.
In the past 2-3 weeks, price of TV panels has gone up by 15-20% and are expected to rise further in the next two months. TV makers in India do not manufacture panels, which is imported from countries like China, Hong Kong, Taiwan, Indonesia, Vietnam and Korea.
LG, Samsung, Innolux and BOE Display are the key makers of TV panels. “Prices of TV beyond 32-inch screen size may go up as there is cost pressure due to increase in panel prices", said Manish Sharma, president and chief executive of Panasonic India and South-Asia. Sharma is also the president of industry lobby Consumer Electronics and Appliances Makers Association (Ceama).
“Panel manufacturers have together created this global shortage to jack up prices considering Indian manufacturers tend to buy in volumes ahead of festive season to ready the stocks," said Avneet Singh Marwah, CEO of Super Plastronics Pvt. Ltd, the licensee of Thomson and Kodak TV brands in India. “Such shortage was created in 2016 also. The maximum price increase for panels has been in 32-inch and 40-inch sizes, which are the highest selling sizes in India," he added.
Marwah said the price increase would be to the extent of 15-20% over the next couple of months. “TV makers can absorb the increase if Goods and Services Tax (GST) is reduced to 18% from 28% for all TVs, as requested by the industry," he added.
The GST Council has last week reduced tax rates to 18% from 28% earlier for TVs have screens smaller than 26 inches.
According to Sharma, companies are trying to absorb increase of cost to the “maximum extent", but there would be price increase.
In India, 32 inch, 40 inch and 43 inch TVs account for more than 80% of the estimated 15 million units a year market. And festive season accounts for about a third of annual TV sales.