New duty structure for Interactive Flat Panel display to create Rs 10,000-cr mkt; to help Dixon's display plans 

Smart TV

The government’s move to bring a graded duty structure to incentivise domestic manufacture of Interactive Flat Panel Displays will substantially push local manufacturing and assembly in the country, resulting in a large market of Rs 8,000-Rs 10,000 crore over time, industry executives and experts told Moneycontrol. The move will benefit players like Dixon, TCL and Samsung in India.

On February 1, Finance Minister Nirmala Sitharaman announced a customs duty (BCD) increase from 10 percent to 20 percent on Interactive Flat Panel Displays (CBU) and a reduction in BCD to 5 percent on Open Cell for the manufacturing of Interactive Flat Panel Display module.

Additionally, BCD is being reduced to 5 percent on the Touch glass sheet and Touch sensor PCB to manufacture Interactive Flat Panel Display modules.

“It is a good news industry. We have been requesting the government and informed them that there is a large market for interactive flat-panel displays,” Sunil Vachani, chairman of Dixon Technologies, told Moneycontrol.

“...the parts were at a higher duty than the finished product. The peak duty is now 20 percent, and the main part, which is open cell, is being brought down to 5 percent, so there is a clear arbitrage of 15 percent for manufacturing in India, and this could be a large market of Rs 8,000-Rs 10,000 crore over time,” he said.

Dixon will invest in an assembly line of interactive flat-panel display TVs and parts, and the production will start in collaboration by September this year.

Pankaj Mohindroo, Chairman of the Indian Cellular and Electronics Association of India, said the 20 percent duty on IFPD (Interactive Flat Panel Display) is because displays are becoming very popular, especially in educational institutes.

“This was a serious anomaly that was creating tremendous confusion. This has now been corrected, resulting in a complete display alignment with the colour television category. Local manufacture and assembly will go up substantially,” Mohindroo added.

The government has also reduced BCD from 2.5 percent to zero on inputs and parts such as chips on film, PCBA, and glass board/substrate cells for manufacturing open LCD/ LED television panel cells.

Vachani said that this move will help Dixon’s plans to make display modules in India in partnership with HKC. The display plant is expected to be operational by October 2025.

“Govt has put duty structure correctly in place wherein parts of the display is at zero, and open cell display is at 5 percent, so there is a clear arbitrage of 5 percent for any company planning to display unit in India out. This will encourage the display manufacturing ecosystem,” he said.

Mohindroo said that the reduction of BCD to zero on inputs and parts for manufacturing of open cells of LCD/LED panels would boost domestic manufacturing of open cells. “...there will be a reasonable differential duty between the finished, open cell and its parts, thus facilitating the manufacturing of the open cell, which is a critical input of the flat panel display,” he added.

The government’s announcement of a graded duty structure to incentivise domestic manufacture of interactive flat panel displays and push open cell manufacturing of LCD and LED TV panels will help create a complete ecosystem for displays, including display fab.

Dixon Technologies is in active discussions with a global technology company to establish a display fabrication facility (fab) worth $3 billion in India, marking a significant step toward becoming a key player in the electronics component industry.

The company is also in the final stages of negotiations for a joint venture with a leading Original Design Manufacturer (ODM), a major supplier of notebooks and servers to global brands. The display fab will cater to Dixon’s existing customers across mobile, television, and notebook segments while also serving other players in the market.

However, some TV brands are unhappy with the government’s decision.

Avneet Singh Marwah, CEO of SPPL, a Kodak and Blaupunkt brand Licensee the reduction in customs duties to nil on open cells and components manufacturing applicable only to industries with bonded (display modules) manufacturing plants creates an uneven playing field for TV manufacturers without access to such facilities.

“The broader TV manufacturing industry does not welcome this policy, and for true growth, these benefits should be extended more equitably across the sector,” Marwah added.