India amended a policy that governs the import of fully-built colour TVs in the country and adding them to a list of restricted items that the government wants to promote via local manufacturing. The decision is likely to impact shipments worth Rs. 7,000 crores headed towards India from China, Vietnam, and Malaysia.
According to the new condition, companies looking to import fully manufactured coloured TVs, will be required to apply for a separate license, while there is no change in the policy around importing monochrome TVs.
India, under the FTA (Free Trade Agreement), had relaxed the restrictions on importing TV sets, apart from another 1428 products, in 2000 and 2001. There was a suspicion in government circles that Chinese finished goods were being channelled into India from South East Asian countries like Vietnam.
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According to a report by Economic Times, India had imported colour TVs worth over $781 million in 2019-20 which includes shipments from Vietnam ($428 million) and China ($292 million) while Malaysia, Thailand, Hong Kong and Germany accounted for the rest.
As seen from these numbers, this move will not increase the end-user prices and will not impact brands that have been assembling television sets locally. Xiaomi has issued a statement saying that 85% of its TVs are being locally manufactured and has welcomed the government’s decision to promote local manufacturing. We reached out to several other manufacturers like Realme and Hisense to get their input and will update this section as and when we receive a response.
However, Indian brands like VU and Chinese manufacturer TCL, who rely mainly on fully assembled TVs imported from other countries will be severely impacted. The same could be the case for Samsung, LG, and Sony who import high-end TVs. Televisions made from locally sourced products and assembled within India form a core part of their sales numbers.
#IMPORT_BANGovernment imposes restrictions on imports of colour TV sets.#WeCare pic.twitter.com/Fr7xQILzlDJuly 31, 2020
But why a ban on TV imports?
India's television market is considered to be worth Rs.25,000 crore with more than 17 million sets sold each year. Out of this, 35% TVs sold in India are imported with 60-65% goods coming directly from China.
With this decision, the government is not only upping its indirect control on Chinese products but is also looking to bolster the domestic manufacturing market which is severely impacted due to the current pandemic. Brands will now be forced to work out local assembly plans in case they want to sell products in the country, which means they need to outsource production to small and medium enterprises locally.
Moreover, this decision can be seen as an extension of the recent ban on Chinese apps, after the border skirmish between Indian and Chinese army. The government is also said to be looking to ban another 275 odd applications citing data privacy and security issues.
Several contract manufacturers such as Dixon, Super Plastronics hold the view that manufacture TVs for global brands will be particularly benefited from this decision and hope that the new rules will help India become self-reliant in this field.
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