Digitization of broadcast, reduced replacement cycles and increased affordability is driving growth in the Indian Flat Panel Display (FPD) TV market.
The LED TV market is witnessing slow and steady growth due to the global trend for energy saving, eco-friendly products and consumer consciousness. The rapidly narrowing price difference between LCD and LED TV is tilting demand in favor of LED TVs.
Frost and Sullivan research estimates that the FPD TV market in India was valued at US $3.55 billion in 2012 and is likely to grow at a compound annual growth rate of 21.7 percent by 2015.
The total market (TM, total consumption) for FPD TV in India in 2012 was 6.48 million units and the total domestic manufacturing (TDM, representing local production) was 1.93 Mn units for the same year. TDM is a low value-add activity, as LCD panels are imported and final leg assembly is performed here.
The import-heavy nature of the FPD TV market has resulted in it being vulnerable to volatile currency conditions. For FPD TVs, 2012 was a turbulent period owing to increased raw material costs while depreciation of the rupee added pressure to the prevailing conditions.
According to Deepa Doraiswamy, Industry Manager, Electronics and Security Practice, Frost and Sullivan, "Availability of easy finance options, enhanced purchasing power, and obsolescence of technology (earlier CRT and LCD in the near future) creating a huge replacement demand, are some of the triggers for rapid growth in the FPD TV market in India.
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Despite huge consumption demand, India sorely lags behind in FPD TV manufacturing and this is an area that needs immediate attention as the future growth trends portend a widening supply-demand gap if the current situation continues." Doraiswamy further opines, "Recent policy initiatives such as the Modified Special Incentive Package Scheme (MSIPS) that provide capital subsidy for manufacturing investments are expected to influence investments in indigenous manufacturing of FPD TVs in the coming years."
Import duty on LCD panels was eliminated in the 2012-13 Budget, which led to anticipation of increased domestic assembly. However, India's Free Trade Agreements (FTAs) with countries such as Thailand are proving to be a restricting factor, as some key manufacturers have built up capacity for FPD TV manufacturing in these locations and the FTA allows them free access to the Indian market.