- Education And Career
- Companies & Markets
- Gadgets & Technology
- After Hours
- Banking & Finance
- Energy & Infra
- Case Study
- Web Exclusive
- Property Review
- Digital India
- Work Life Balance
- Test category by sumit
“The Big Indian Pli Scheme –Will It Be An Elusive Dream For India’s Tv Manufacturers ?”
India is a very price-sensitive market, its noteworthy to mention that most of the 32inch smart TV that were available for anywhere starting Rs 10,000 onwards are already retailing upwards of Rs 14,000.
Photo Credit :
When the Honourable FinMin Ms. Nirmala Sitharaman made the announcement in November, 2020 to extend the five-year PLI Scheme and include 10 new sectors to support domestic manufacturing and promote India as the next ‘Global Manufacturing Hub’; it worked as a ‘Glow in the Dark’ giving hope and relief to many, as like all other industries, Indian manufacturing too, reeled from the impact and economic crisis that COVID pandemic inflicted. Hooting aggressively for PLI scheme were also the domestic TV manufacturers from the front row, as they could clearly foresee the benefit of both business scalability and generation of employment that the scheme was promising to bring. However, some of the sectors which got an immediate nod were pharmaceuticals, telecom, automobiles, auto components, textile, food products.
Come, February 2021 and the Minister announced Union Budget. This once again kindled many hopes , but for the elusive TV manufacturer. As this time, the Minister promised to include 13 new sectors to the PLI Scheme list . Everyone swelled with joy and renewed sentiment of recovery, however, the Indian Tv manufacturer remained hustled away , groping in dark, confused wondering how the Government is continuing to turn a blind eye to some pertinent facts. And the list of these facts are a bit long indeed !
The fact is that, in India the Televisions are the most-penetrated large-appliance (at 85% penetration rate), vis a via AC's ( at 6% ); Washing Machines( at 11 %) and
Refrigerators ( at 35%) respectively. The fact is, that there that the television manufacturing sector is on the anvil of a boon, and joining this boon will also be the global brands, especially Chinese, that will look to partner with local manufacturers.
The fact is that, despite other countries having better infrastructure, and maybe even better ease of doing business, scales will tip in favour of India, singularly because of its large market, which makes it a lucrative and undisputed game changer.
Further, the fact is that, the Indian television market has faced a crunch due to rising component prices and raw material costs which have increased by 350% over the last year. The Government had imposed a 5 per cent customs duty and ocean freight on the import of open-cell for televisions. The fact is that, currently there is a shortage of open cell panels globally, and only a handful of Chinese and Taiwanese firms are controlling the flat-panel market , which is allowing them to raise prices, that is hurting the domestic manufacturers costing. The fact is that, although the Government aims to spend ₹1.97 lakh crore on various PLI schemes over the next 5 years, starting from this fiscal , in addition to the earlier announced ₹40,951 crore for the PLI for electronic manufacturing schemes, there still stands no clarity for Indian TV manufacturers.
Truth be told, all the above and more underlying facts will consequentially lead to escalation of TV prices, which have already risen to the tune of 300% in last 8months alone. Come, 1st April 2021, if the Government continues to stay tight-lipped over the matter; it will seriously and surely hurt the consumers buying sentiment. Further crashing the demand altogether, making economic recovery of the sector rather impossible.
So what lies ahead ; is a pragmatic approach. The Government of India has already been taking steps to encourage television manufacturing in India. In July last year, the cabinet imposed restrictions by changing the import policy for colour televisions from "free" to "restricted".
However, a boost needs to be given to the local TV manufacturers times are tough. The Government needs to give some pushback , so some momentum can be built and sustained.
The 4-6 per cent incentive that the PLI is set to offer ; the Government must genuinely evaluate, bringing TV manufacturing under this scheme, as this will make Indian TV industry more competitive on global stage and help pass the cost benefit to the consumer, directly.
Let’s face it, India is a very price-sensitive market, its noteworthy to mention that most of the 32inch smart TV that were available for anywhere starting Rs 10,000 onwards are already retailing upwards of Rs 14,000. As a result, there has been a downfall of 20 per cent in terms of demand for televisions. So, let’s stay sensitive and privy to what is around and not add more woes to our challenges. It will be best if we instead work at cutting our trials and instead, work towards firming India’s leadership in ‘The Global Supply Chain’, the only competent suitor, the only one to dare and displace China !
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.