Duty exemption on open cell parts divides TV makers

Some manufacturers sees it as a big boost, but others say it will only benefit a few companies

- Shouvik Das & Suneera Tandon

The exemption of import duties on components required for making open cells-a key part of LED televisions-has divided India's nearly $10-billion TV industry. A section of manufacturers sees the budget announcement as a big boost, but others say the relief will only benefit specific companies, not the entire sector.

"The duty abolition will only benefit select brands with the technology to set up direct shops in India, instead of encouraging local brands to participate in an open manufacturing industry," Avneet Singh Marwah, chief executive at Super Plastronics, a contract manufacturer of electronics, told Mint.

"Open cell manufacturing can only be set-up in partnership with one company at a time, which is the rule that these companies work on," Marwah said.

"The reduction of duties will only bring more profits to foreign firms, rather than adding value to India's electronics ecosystem."

China's TCL Technology is the only firm in India that currently has the capacity for open-cell manufacturing. It is reportedly setting up a $3-billion display fabrication unit with Noida-based Dixon Technologies Ltd.

An open cell is one of the four most critical components of a TV, accounting for the highest value of about $1 billion in the nation's TV market that market researcher IDC sees reaching over $10 billion by the end of this fiscal.