NEW DELHI: In a fresh bid to boost domestic production under the Make in India project, the Indian government has increased the import duty on set-top boxes (STBs) to 20 per cent, including a host of other electronic items such as TVs sets and smartphones.
The duty hike from 10 per cent could impact the ongoing digitisation of TV services in India. Experts and stakeholders in the country’s broadcast and cable industry are still assessing the directive, including the fact whether the move is aimed at arresting imports from China.
A ministry of finance notification dated 14 December 2017 stated the federal government was “satisfied” that the import duty on certain goods, including electronics, should be increased as “circumstances exist” that render it “necessary to take immediate action”.
Though officially over, India’s digitisation of TV services is still a work in progress with many big MSOs admitting in private that the last and fourth phase is still far from over.
A cable industry source highlighted that India’s DTH operators annually import about 10 million STBs, while an additional 20 million boxes approximately would still be needed to fully cover areas falling under phase IV of digitisation.
While many India companies, including big companies like the Hero group, are manufacturing and/or assembling STBs in India, the supply, according to industry sources, isn’t enough to meet the demand. It is also expected that whenever the next round of survey is undertaken, the total number of TV homes in India would increase much beyond the figure of 183 million (as indicated by BARC India).
Will this increase in import duty also up the cost of STBs for consumers via a mixed business model of rentals and outright purchase of the product? It’s still not clear.
An industry source, however, said whether this government move would give a fillip to domestic manufacturing is not yet known. Most Indian DTH operators have already started importing STBs from countries like Thailand and Vietnam to take advantage of an ASEAN (Association of Southeast Asian Nations) trade pact, which is aimed at lowering trade barriers and help economic growth in general.
STBs can be now imported by Indian companies from ASEAN countries at very low tax rate that is in the range of 2-3 per cent, the source elaborated.
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