Excise duty cut may help RO membrane manufacturing

However, benefit of cut may not be passed on to consumer

Water purifier makers using advanced reverse osmosis (RO) technology see opportunities to locally start manufacturing RO membrane following the slashing of excise duty on the component to 6 per cent in the Budget.

"Reduction in exercise duty on membrane will encourage domestic companies like us to start membrane manufacturing locally," Kent RO Systems Chairman Mahesh Gupta told PTI.

Kent RO Systems is one of the leading players in the estimated Rs 2,700 crore water purifier market in India along with Eureka Forbes, Whirlpool of India and HUL which use RO technology.

At present, the RO membranes that play the most important role in filtering impurities in water purifiers, are mostly imported from abroad.

When asked if the reduction in excise on RO membranes would lead to a reduction in prices of water purifiers, Eureka Forbes CEO Direct Sales & Sr Vice President Marketing Marzin R Shroff said it was unlikely.

"While the drop in excise duty is a welcome move, a membrane is only one part of the overall purifier which itself is made up of several other components. Hence the overall impact may not be substantial," he said.

Expressing similar views, Gupta said only the excise duty on RO membrane was cut and not the customs duty.

Meanwhile, another water purifier maker Whirlpool of India said that it would like to wait till a final clarity on the issue comes out.

While presenting the Budget last week, Finance Minister Arun Jaitley had proposed to reduce excise duty on RO membrane element used in household type filters to 6 per cent from 10-12 per cent earlier.

The move was aimed at encouraging more provisions to boost water purification manufacturing in India.