India's customs duty decision may hit flat TV sales in the UAE

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India's decision to impose customs duty on flat television panels, the latest move to arrest the steep fall of Rupee, is likely to have an impact in the UAE with the electronics retailers bracing for a 20% decline in sales.

 

According to a news report, the total market size of TV sets in the UAE is around 85,000 per month and TV sets being carried to India are around 20,000 monthly.

 

"Sales for TVs will definitely be impacted as it isn't only NRIs buying TVs to take back to India but also tourists. We estimate that TV unit sales could be affected by as much as 20% overall," Khaleej Times reported Jacky's Electronics chief operating officer, Ashish Panjabi as saying.

 

Beginning August 26, India has decided to levy a 35% customs duty on LCD and LED television sets that passengers bring along with them as part of the duty-free baggage allowance of Rs 35,000.

 

According to Panjabi, sales revenue may not quite drop to this extent as tourists and NRIs generally go for 32 or 40-inch models to carry back to India, whereas higher-ticket value items like 46-inch TVs and above have largely been confined to the domestic market.

 

"The action taken by the Indian government to impose customs duty on flat panels brought to the country by air passengers, which hitherto were totally exempted, cannot be seen in isolation to arrest the rupee's decline," Dr Ram Buxani, president of the ITL Group said.

 

According to Buxani, this is simply correcting the system, which may, in short run, affect Duba's already not-so-bright electronics trade, but will bring stability to the business which is the long-term goal.

 

Buxani said the government of India should encourage local production so that there is health in the electronic business in the country.

 

The practice was a lucrative business as Indians used to bring LCD and LED from Dubai, Thailand and Singapore under the duty-free baggage allowance of Rs 35,000.

 

It is estimated that a 32-inch TV set in Thailand costs up to Rs 18,000; in India, it ranges between Rs 30,000 to Rs 35,000. Customs officials said the airports in major metros witnessed a sharp increase in imports of TV sets largely from Thailand and Dubai by tourists from home.