Sony, LG, Panasonic, Samsung to increase costs of LED and OLED TVs in India

If we recall, the Indian government had raised customs duty on imported panels to 15 percent from the existing 7.5 percent during the budget 2018 announcement. The government had also increased the customs duty on parts of LCD/LED/OLED TVs to 15 percent from the existing 10 percent to boost domestic manufacturing. And now we are seeing the effects of the new norms that the government has set. According to reports, leading TV manufacturers like Sony, LG, Panasonic and Samsung are set to increase prices of their LED/OLED sets by up to 7 percent to offset the impact of an increase in customs duty.

Manufacturers are also expecting a short-term impact on sales and the Consumer Electronics and Appliances Manufacturers Association (CEAMA) has reportedly initiated a dialogue with the government to reconsider the duty hike.

Talking about the responses that the brands have now given, Panasonic is said to go for a hike of 2-7 percent on its range of LED/OLED TVs. "The increase in the prices of LED/OLED TVs and thereby, an impact on the consumer demand will be imminent with the proposed custom hike. In line, we will be increasing our prices by 2 percent to 7 percent," Panasonic India Business Head Consumer Electronics Division Sales Neeraj Bahl told PTI.

Samsung is reportedly planning for a hike of around 5-6 percent. Whereas LG Electronics India Managing Director Ki Wan Kim has stated that there is "no way to avoid it" and that LG was still working on it. "Internally we would try our best to absorb some of the additional cost through R&D innovation and manufacturing innovations by improving the productivity," added Kim.

Popular brand Sony has said the prices have not increased but the company is currently evaluating the mid and long-term impact of the duty. "Keeping the current situation in mind, it seems likely that we may have to increase the price in the future," said Sony India Bravia Business Head Sachin Rai.

According to the CEAMA, the price increase will likely have a negative impact on the demand and thus further affect the panel industry in short term, which is already going through rough times for the last two consecutive years. "We believe in the short-term, the move will drive inflation and have a setback on consumption as prices may go up to 7 percent impacting the demand for TVs and further limit the scope of expansion and creation of more job opportunities," said CEAMA President Manish Sharma. "CEAMA has already initiated a dialogue with the Government of India and the Ministry of Finance, seeking a reversal on the customs duty hike of up to 10 percent on open cell and other components of the panel."

Further, on being asked whether price hike would impact the prospects of the industry, Rai mentioned that the economic indicators and purchase patterns for TV in India reflect a positive picture and considering that there has been consistent growth in the television sector over the years, the current scenario may not severely hamper the overall situation. "Such short-term dips are likely to be compensated with strong come-back in the mid-long term," he said.

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"On the flip side, the industry can benefit as it will encourage local manufacturing if looked at through a phased manufacturing programme," the CEAMA said.

Inputs from PTI