In the upcoming budget, the domestic appliances and consumer electronics industry anticipates an increase in customs duty on finished goods to discourage imports and facilitate import substitution, as well as incentives for specific R&D and localisation projects under the productivity linked incentive (PLI) scheme. According to the Consumer Electronics and Appliance Manufacturers Association, the nearly 75,000-crore industry is anticipating “certain enablers” that will encourage domestic manufacturing (CEAMA).
“To further encourage local manufacturers, a 5% duty differential between parts and finished goods should be implemented. This will provide much-needed incentives to manufacturers and aid in the establishment of a manufacturing base in India “Eric Braganza, President of CEAMA. It has also requested a duty structure road map for the LED industry for the next five years in order to properly plan investments and policy interventions. “A two-hundred percent weighted deduction for R&D (research and development) expenditures is critical for Indian manufacturers to maintain technological advancement. Under the PLI scheme, incentives can also be given for specific R&D and localisation projects in the field of electronics “He stated.
Mr. Braganza added that the industry anticipates the government lowering the GST on air conditioners to an 18% tax slab, as well as a similar reduction for TVs with screens larger than 105 cm. Furthermore, some manufacturers anticipate that the government will lower the GST slab for energy-efficient products to 12%, which will not only help to drive demand but also increase the adoption of sustainable appliances — in line with India’s commitment to climate goals. The Budget session will begin on January 31, with Finance Minister Nirmala Sitharaman presenting the annual Budget on February 1.
Godrej Appliances Business Head and Executive Vice-President Kamal Nandi stated that the industry has been dealing with unprecedented commodity prices, component shortages, and subdued volume growth, particularly in high volume segments on the demand side. Air conditioners, refrigerators, and washing machines have all become necessary household items. “We anticipate that the GST on these products will be rationalised in this Budget. Air conditioners are still subject to the highest tax rate of 28%, which we expect to be reduced to 18%. Appliance penetration levels continue to lag, and lower tax slabs will help to correct this. Increased penetration and volume will help propel manufacturing in these sectors as well “He continued.
Manish Sharma, Panasonic’s CEO for India and South Asia, stated that the industry can expect an increase in import tariffs on completely built-up (CBU) audio products. “Audio technology is a growing market, and with new players entering the fray, the demand and opportunities to meet it are at an all-time high. We anticipate that some tariff barriers on audio will be imposed in order to encourage domestic manufacturing “Mr. Sharma stated.
