India Budget Boosts Local TV Production: Duty Tweaks, Tax Reliefs

New Delhi, Feb 1 (PTI) The government's proposal to double customs duty on touchscreen display TVs and reduction of levies on inputs for manufacturing open cells will help boost local manufacturing of the sector, the TV makers said on Saturday.

They also said that the income tax reliefs will boost consumer spending on the sector by the middle class.

However, some small players pointed out that the reduction of duty on components for manufacturing Open Cell will help only certain big players and may create an "uneven playing field".

"The approach of aligning inverted duty structure and increase in BCD (basic customs duty) on interactive flat panel displays from 10 per cent to 20 per cent, will be an enabler for enhancing manufacturing in India," Panasonic Life Solutions India & SA Chairman Manish Sharma said.

Open Cell panel is an important part of TV manufacturing as it covers more than half the cost of a unit. Companies import television panels in an Open-Cell state, which requires further assembling with value addition before being shipped to the market for sale.

Further, the industry hailed the BCD exemption announcement for critical minerals like cobalt stating it will help India overcome disabilities that exist in the manufacturing of lithium-ion batteries as compared to other countries.

Videotex, an original design manufacturer for many leading OEMs (original equipment manufacturers) for LED televisions and motherboards, said the Union Budget gives a "significant push" toward supporting the electronics manufacturing sector.

"The drop in BCD from 2.5 per cent to nil on parts of the panel is a welcome move," Videotex Director Arjun Bajaj said, adding, "This adjustment can be seen as a long-term strategy to attract more key players and build local facilities."

However, he added that currently there is only one facility in India with limited capacity to process these parts.

Challenges of significant investments and resource tie-ups for localisation still persist.

"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," Bajaj noted.

Moreover, the enhanced income tax slabs provide a potential boost to the disposable income of middle-class families, which could help drive demand and offer a much-needed uplift to the sector, he added.

According to Counterpoint Research, India's smart TV market is around 13.4 million units and close to USD 6 billion in revenues.

“With current budget changes on encouraging local assembly of displays with reduction in duties on Open Cell should catalyse local assembly of display which is the costliest part in TV and drive 5-10 per cent cost savings for OEMs eventually,” Counterpoint Research VP Research Neil Shah told PTI.

Noida-based TV maker SPPL, which has licenses for brands, including Kodak, Philips, JVC and Blaupunkt, said the duty tweaking to nil on Open Cells and components manufacturing applicable is only to industries with bonded manufacturing plants, creates an "uneven playing field" for TV manufacturers without access to such facilities.

"This policy is not welcomed by the broader TV manufacturing industry, and for true growth, these benefits should be extended more equitably across the sector," he said.

While presenting the budget for 2025-26, Sitharaman in the parliament said in line with the 'Make in India' policy and to rectify the inverted duty structure "I propose to increase the duty on Interactive Flat Panel Display (IFPD) to 20 per cent and reduce the BCD to 5 per cent on Open Cell and other components.