The commerce ministry has proposed levying an anti-dumping duty, ranging from 10% to 22%, across different categories of colour picture tubes (CPTs) that are being imported by television manufacturers.
The proposal, moved on May 7 and currently with the finance ministry has led the industry to cry foul. If notified, the industry fears that it would make the import of picture tubes expensive and lead to an increase in the cost of televisions in the domestic market vis-a-vis completely build television sets that can be imported from Thailand at 0% duty under the FTA that India has with Thailand.
?The government?s proposal to impose an anti dumping duty of 10%, 12% and 22% on 14 inch, 21 inch and 29 inch CPTs respectively, over and above the existing 10% custom duty on components, will lead to an increase in input costs and this in turn would force the industry players to increase prices, hence impacting the end user,? says R Zutshi, president, Consumer Electronics and Appliances Manufacturers Association (CEAMA).
According to Zutshi, this would hit the consumer electronic industry hard. ?There is wide gap between the demand and supply of picture tubes in the domestic market. Moreover, the picture tubes manufactured in the country do not meet international standards and there is a complete non-availability of 21 and 29 inch slim and ultra slim picture tubes in India. This has compelled major players to import CPTs from China, Malaysia, Korea and Thailand,? he says. According to industry estimates, over 15 million units of television sets would be sold in India in 2008 and the only domestic manufacturers, Samtel Color and JCT Electronics, has the capacity to produce 10 million units. Hence, there is a gap of over 5 million units and this could be met only through imports.
Adds Anoop Kumar, ex-president, CEAMA. ?There is an inverted duty structure in the country wherein completely build units of CTVs can be imported from Thailand at 0% duty or from China at 10% import duty. Hence, over 100% increase in the import duty on CPTs, after the anti dumping duty is in vogue, will compel companies to set up bases outside India. Also, it would lead to an increase in the grey market which is already growing at 10-15% a year in India.