With the import of colour TV sets restricted, TV sets of 80 inches and above could be missing from stores this festive season. While the DGFT move is aimed at promoting the Make-in-India mission, setting up manufacturing units will be a very lengthy process.
Don’t be surprised if some ‘colour’ would be missing this festive season.
High-end television sets of 80 inches and above, which are imported, could be missing from stores and e-commerce platforms during the sale season that will begin September-end.
Sources told Moneycontrol that after a July 30 notification by the Directorate General of Foreign Trade (DGFT), which placed import of colour televisions of all sizes in the restricted category, import licence would be granted only to select brands.
“The idea is to ensure that brands produce television sets locally. If ever applicant gets a licence, the ‘Make in India’ mission will be defeated,” said an official.
Almost 60 percent of the annual TV sales in India take place during the September-December festive season, mainly because of the heavy discounts and product launches.
Who imports colour TV sets to India?
Large-screen TV sets (80 inches and above) are imported by brands like TCL, Samsung, LG, Xiaomi and Sony, since there is no local manufacturing capacity in India.
TCL India Country Manager Mike Chen told Moneycontrol that the brand has applied for a licence to import large-screen TVs.
TV is one of the larger segments under the entire domain of Appliance and Consumer Electronics, accounting for almost 17 million units, with an estimated worth of almost Rs 25,000 crore.
About 30 percent televisions sold in India are imported from countries like China and Vietnam. The government move is to indigenise the production of televisions and lower the reliance on imports.
Why can’t companies set up manufacturing units in India?
Setting up a manufacturing facility can cost Rs 50 crore- Rs 100 crore. Even if companies are willing, red-tapism leads to inordinate delays in setting up facilities, industry sources said. The easier route, therefore, is to import.
Also, the skill sets and equipment for making high-end sets are different from those for 32-inch and 40-inch TV sets.
“It cannot be said both can be produced in one factory. The raw materials have to be fully imported as there are no manufacturing facilities for the panels and internal parts in India.
“Instead of us importing all parts and merely assembling TV sets here, isn’t it logical to completely import them?” said the head of television business at a white goods firm.
How does import licence work?
The DGFT had said in July that the import of colour TV sets has been moved to the 'restricted' category from the ‘free’ category. Now, any company that wants to import a colour TV set has to secure a special licence.
Once a candidate applies for a licence, there will be a series of checks initially to verify the credentials of the brand.
“If it is an established brand in the Indian market for 4-5 years, it will be considered. If it is a new brand, details about the financial strength of the company and the need to import will be sought,” said a government official.
For established brands, there will be no credential-checking. However, details on the need to import will be sought.
The list of manufacturing facilities in India and the cumulative investment in these entities will also be sought. Post this, the company management will be required to explain why the existing manufacturing capacities cannot be used to produce the TV sets here instead of importing them.
Once the details on the need to import are collected, the documents will be further reviewed. For brands that do not have any manufacturing facility in India, clarification will be sought from the company management on the reasons for this and whether they have any future plan for setting up India production plants.
“We understand that it will be a lengthy process but are hoping that the products reach us by the end of October. Else, the festive season will be a washout,” said the chief distribution officer at a consumer durables firm.
Ever since the China-India clash at the Galwan Valley on June 15 that resulted in the death of 20 Indian soldiers, the Indian government had toughened its stand on imports from China.This has led to a pile-up of goods at ports after the customs department sought detailed documents from importers. Even though the pile-up was slowly being cleared from July, close to 21,700 TV sets of 75 inches and above are still stuck at various ports, pending DGFT clearance.