Dear Mr. Finance Minister...

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: Sir,

The unreasonable protection to the colour picture tube industry has slowed down growth of the domestic CTV industry. While in 1985, China’s CTV production was twice that of India, in 2002, it grew six times more.

A 10 per cent reduction in customs duty on colour picture tubes (CPTs) will help the industry achieve sales of 10 million units in 2004-05. It will make the domestic CTV industry globally competitive. It will also lead to buoyancy in revenue with increased sales and exports.

Despite continuous reduction in prices, CTV prices are still at a higher level here, compared to prices in global markets, mainly because customs duty on CPTs and CTVs have been kept at par, which is unfair to the CTV industry. No other component of CTVs or other consumer goods is subject to this type of over protection. Since CPTs constitute 50 per cent of the cost of inputs of a CTV set, growth of this industry is highly dependent on its price. The government protection of the CPT industry encouraged predatory pricing by local manufacturers.

The Cetma and Elcina jointly made a representation to the government for differential rate of customs duty on colour glass parts, CPTs and CTVs. Customs duty on all the inputs and intermediate products, including CPTs, populated PCBs for audio/video products, tape deck mechanisms and other raw materials including plastics, aluminium, copper, steel, zinc, lead etc should be 10 per cent and finished products such as TV sets, music systems should be 20 per cent. Electronic components should not have any customs duty at all.

Regarding SAD, we favour its abolition. However, if this is not acceptable, it should be made Modvatable. We also want a customs duty cut on capital equipment, which is 15 per cent on specified capital equipment now. The indigenous capital industry for electronics sector is non-existent. It should not be considered as a finished product. High customs duty on capital equipment increases the project cost, thereby making the industry non-competitive. Customs duty on all capital equipment for the electronics industry should be completely abolished to encourage growth of the electronic hardware industry.