In a bid to strengthen “Make-in-India” ,the government has decided to exempt parts used to manufacture open cells of TV panels of LED Televisions from basic custom duty. It has also increased Basic Customs Duty (BCD) on Interactive Flat Panel Display (IFPD) from 10 per cent to 20 per cent. At the same time, it has decided to reduce the BCD to 5 per cent on Open Cell and other components used to make IFPD.

Sunil Vachani, Chairman, Dixon Technologies told businessline, “ To deepen the manufacturing for components for LED Televisions in India, the government has decided to reduce the BCD on parts for open cell from 2.5 per cent to zero. With this there is a clear arbitrage of 5 per cent, wherein parts of the display is at zero, and open cell display is at 5 percent. So this will encourage manufacturing of open cell display models in India. We are putting up a plant to make display panels for television, which is coming up in Noida region.” The parts exempted from BCD include chips on film, PCBA, and glass board or substrate cells used in manufacturing open television panel cells.

On Interactive Flat Panel Display(IFPD), Vachani said, “ IFPDs are used across boardrooms and classrooms and is a fast growing market estimated at about ₹7000 crore. But this sector was facing an inverted duty structure, wherein the components were at higher duty than the finished product. That has now been corrected and will spur manufacturing of IFPDs in India.”

Manish Sharma, Chairman, Panasonic Life Solutions India & SA said rationalisation of custom tariff structure is a step in the right direction. “The approach of aligning inverted duty structure and increase in BCD on interactive flat panel displays from 10 per cent to 20 per cent , will be an enabler for enhancing manufacturing in India. Reduction of duty in components for manufacturing Open Cell is also in the direction towards making a robust manufacturing base for LCD/ LED television panels in India,” he added.

Reduction in BCD

But some industry players said reduction in BCD for open cell parts for LED televisions will only benefit certain players. Avneet Singh Marwah, CEO, SPPL, a Kodak and Blaupunkt brand Licensee said, “This is applicable only to industries with bonded manufacturing plants and creates an uneven playing field for TV manufacturers without access to such facilities. For true growth, these benefits should be extended more equitably across the sector.”

Arjun Bajaj, Director of Videotex added, “The exemption of BCD on parts of the panel is a welcome move, though it should be noted that there is only one facility in India with limited capacity to process these parts.The ongoing reliance on imported open cells, due to a lack of local manufacturing capacity, remains a critical challenge. A more substantial reduction in BCD—perhaps on more components—could have better supported the sector’s growth”.

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