 "New govt initiatives, FIFA World Cup may turn around fortunes of consumer electronics sector")
The new NDA-government seems to have positive effect on the consumer durables sector. While the consumer durables sector has seen a recent slowdown, the Consumer Electronics and Manufacturing Association (CEAMA) expects a different story June-onwards. Soaring temperatures and delayed monsoons have led to a hike in sales of air-conditioners and refrigerators.
Simultaneously, cable TV digitalisation, which is anticipated to enter into its 3rd and final phase, is expected to achieve 75 million units in the next 1-2 years. Cable TV digitalisation is dependent on imports, as Indian manufacturers are crippled by an extra 12.5 to 14% VAT, due to cable and DTH operators not providing them 'C' Form, since they are leasing out boxes. Chinese imported set top boxes do not have to face VAT charges. With the massive employment generation and government revenue generated by cable TV digitalisation, it is important to address this issue.
Anirudh Dhoot, President, CEAMA, and Director, Videocon, stated, “We recommend that 'C' form waiver should be applicable to set top boxes. It would provide a boost to India's set top box manufacturing. The set top box industry provides huge potential for economic activity, employment generation and saving valuable foreign exchange and increased revenue for the government.”
In the midst of government policies, a new factor which is being seen as a massive stimulus for the TV sales is the FIFA World Cup 2014, the world's biggest sporting tournament. TV sales are expected to grow aggressively between June-July, especially in soccer-centric markets like West Bengal, Goa, Kerala and the North-East.
With the new government in place CEAMA is expecting fresh guidelines and rules leading to significant growth. Advancement in technology, economic growth and increased man power are certain factors which are expected from the new government which will further strengthen and push the consumer durable industry to reach a new height.
Dhoot said, “The consumer electronics and home appliances industry, which is currently struggling due to sluggish market conditions, expects a turnaround from the positive Government initiatives. The relief provided to the Industry, via interim Budget, through significant reductions in the Excise Duty, from 12% to 10% on products, inputs and parts, has helped the sector. CEAMA would request for this continued support in this fiscal as the industry is still struggling and Index of Industrial Production (IIP) has not shown a healthy growth."
Keeping such positive indicators in mind, he also suggested reforms to address existing industry issues. Dhoot added, “We strongly propose removal of the inverted duty structure on consumer electronics and home appliances, arising due to implementation of free trade agreements (FTAs). CEAMA recommends to review the existing FTAs which have not been in favour of the industry overall and not to sign any new FTAs for next 5 years. The government should also accelerate implementation of uniform Goods & Service Tax (GST) that will lower transaction costs.”
Simultaneously, cable TV digitalisation, which is anticipated to enter into its 3rd and final phase, is expected to achieve 75 million units in the next 1-2 years. Cable TV digitalisation is dependent on imports, as Indian manufacturers are crippled by an extra 12.5 to 14% VAT, due to cable and DTH operators not providing them 'C' Form, since they are leasing out boxes. Chinese imported set top boxes do not have to face VAT charges. With the massive employment generation and government revenue generated by cable TV digitalisation, it is important to address this issue.
Anirudh Dhoot, President, CEAMA, and Director, Videocon, stated, “We recommend that 'C' form waiver should be applicable to set top boxes. It would provide a boost to India's set top box manufacturing. The set top box industry provides huge potential for economic activity, employment generation and saving valuable foreign exchange and increased revenue for the government.”
In the midst of government policies, a new factor which is being seen as a massive stimulus for the TV sales is the FIFA World Cup 2014, the world's biggest sporting tournament. TV sales are expected to grow aggressively between June-July, especially in soccer-centric markets like West Bengal, Goa, Kerala and the North-East.
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With the new government in place CEAMA is expecting fresh guidelines and rules leading to significant growth. Advancement in technology, economic growth and increased man power are certain factors which are expected from the new government which will further strengthen and push the consumer durable industry to reach a new height.
Dhoot said, “The consumer electronics and home appliances industry, which is currently struggling due to sluggish market conditions, expects a turnaround from the positive Government initiatives. The relief provided to the Industry, via interim Budget, through significant reductions in the Excise Duty, from 12% to 10% on products, inputs and parts, has helped the sector. CEAMA would request for this continued support in this fiscal as the industry is still struggling and Index of Industrial Production (IIP) has not shown a healthy growth."
Keeping such positive indicators in mind, he also suggested reforms to address existing industry issues. Dhoot added, “We strongly propose removal of the inverted duty structure on consumer electronics and home appliances, arising due to implementation of free trade agreements (FTAs). CEAMA recommends to review the existing FTAs which have not been in favour of the industry overall and not to sign any new FTAs for next 5 years. The government should also accelerate implementation of uniform Goods & Service Tax (GST) that will lower transaction costs.”