LED makers want ban on Chinese lighting product imports to India

The Indian LED lighting market is estimated to be Rs 10,500 crore, growing at 10-12 percent every year. Representational image

There is little doubt that the success of India’s Atmanirbhar or self-reliance plan, in the long term, will have to come at the expense of China.

Take the case of light emitting diode (LED) makers from India, who now want a complete ban on import of Chinese lights into the country.

Sources told Moneycontrol that the manufacturers have approached the Ministry of Electronics and Information Technology  (MeITY), seeking relief in this matter.

“If India wants to become ‘Atmanirbhar’ or self-reliant, we need to fully depend on goods made in the country. Chinese lights are inferior in quality and hence priced significantly cheaper. This is impacting our business,” said a Senior Vice President heading the consumer lighting business at an electronic goods firm.

The Indian LED lighting market is estimated to be Rs 10,500 crore, growing at 10-12 percent every year. Large players in the LED lighting market include Havells, Bajaj Electricals, Crompton Greaves Consumer, Wipro Lighting and Philips.

Presently, about 30 percent of finished products are imported from China in the organised market. However, this figure could be as high as 70 percent in the unorganised sector.

The head of retail lighting at an appliance firm said that if it is not feasible to place a complete ban, the government should place a 50 percent customs duty for imported products.

At present, there is a 20 percent customs duty imposition on imported LED lighting. The components used for manufacturing LED lights, including drivers and switches like MCPCBs, invite a 10 percent customs duty. For the latter, the levy was hiked to 10 percent from 5 percent during the Union Budget, 2021.

Said VP-Retail at a consumer appliance firm: "The prices of Made in India products are going up because components imported from China are getting expensive. But finished goods from China are flooding the Indian market and online. Sometimes even the country of origin is concealed."

The price difference is stark. A regular 9-watt LED bulb manufactured by known brands, costs between Rs 85-90 per piece while those manufactured in China are priced at Rs 20-22, despite the duty.

While the Rs 6,238 crore production-linked incentive (PLI) scheme approved by the government, has been set aside for the white goods category, the exact breakup for LED lighting is not yet known.

LED makers said that while this scheme will benefit existing manufacturers to expand their production facility, there is no disincentive against importing from China.

The manufacturers have also sought a special financial incentive to produce components for lighting products, which has not been allocated by the government.

Ever since the Galwan Valley attack by China in June 2020, when 20 Indian soldiers were killed, there has been an outcry against purchase of products manufactured in China. However, markets across India are still flooded with Chinese lighting products.

In fact, an official from a large Indian LED maker told Moneycontrol that the lights that pass off as LED from China are, in fact, modified halogen lights.

"A regular customer won't be able to spot the difference if the package is labeled 'LED'. But energy consumption will be much higher," he added.

LED lights consume about 60-70 percent less energy than the traditional lights. These lights also last 10-15 times longer than incandescent and halogen lights.