March 2, 2015: Through Budget 2015, the Indian government has once again tried to give impetus to the ‘Make in India’ initiative to boost local manufacturing of LED and electronics products. It has cut excise duty on locally made LED/LCD panels, LED lights and LED lamps, and customs duty on components used in expensive electronic products like organic LED (OLED) televisions, aiming to promote the ‘Make in India’ campaign. However, industry players believe that this initiative will not lead to any significant investment in these premium electronics products as the market for these products in India is too small, which will not make local manufacturing viable.
Indian Budget 2015 has cut customs duty on OLED television panels from 10% earlier, but OLED TVs sold at Rs 3 lakh-3.5 lakh in India, has less than a 1% market share of the LED television market in India. As a result, the savings done by locally manufacturing them nor the market size for these OLED products will not lead to any investment on manufacturing OLED products in India. In fact the market for OLED TV is so small in India that it does not make sense to even assemble them locally. Only LG India sells OLED TV in India.
Companies that assemble LED TVs in India source panels from China, Taiwan, Japan and Korea, and hence duty exemption on these components make so sense to them. The cut in excise duty on components used in LED lights, fixtures and lamps to 6% from 12% will also have less impact as this segment also has only 2-3% of the Rs 120,000 million lighting market in India.
The Budget did not give any incentives in manufacturing or assembling LED TVs, which could have led to more investment since several new brands are entering this segment in India.
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