After apps and Telecom sector, Modi govt gives a big jolt to China in the Consumer Electronics Sector

The Modi government is on a roll when it comes to brutally punishing China for its military misadventures. First, India went after the Chinese apps ecosystem banning 59 such apps apart from bringing another 275 Chinese apps on its radar. Then, government sources revealed plans to exclude Chinese telecom giant Huawei from the 5G roll-out.

Having already kicked out Chinese apps and telecom giant, the Modi government is now going after China in the consumer electronics sector. India is accelerating the exodus of South Korean electronics companies out of China and also imposing restrictions on colour TV imports.

As per latest reports, India has banned the import of Chinese colour TV sets in a bid to promote local manufacturing. The Directorate General of Foreign Trade (DGFT), a wing of the Union Ministry of Commerce and Industry, issued a notification on Thursday that has altered the import policy of colour TV sets from free to restricted.

HT has quoted an official as saying,  “Import of colour TV is now in the restricted category, which would necessitate an importer to seek import license from the government. The main purpose of this move is to check influx of China TVs.”

India has a massive Rs. 15,000 crore worth of the TV market, but over 36 per cent of this industry is dominated by imports from China and Southeast Asia. Republic claimed that as per sources, the present move is bound to affect Chinese TV sales in India to the tune of one billion US Dollars.

Now, DGFT will also issue the process for grant of license in the colour TV sets sector. India is not only banning the import of Chinese TV sets but also ensuring that Chinese colour television sets do not reach India via third countries.

HT quoted an anonymous official as saying, “Many such items enter Indian market taking advantage of ASEAN India FTA imports at reduced or zero duty, putting our domestic industry at a disadvantage. Such imports cannot be controlled through increased duty rates. Hence, the government is taking measures such as non-duty actions like import restrictions.”

India has actually been trying to bolster its electronics industry and the ban on Chinese TV sets imports is a part of this larger effort. A second official told HT that India has created necessary infrastructure and also put in place arrangements for the production of cost-effective electronic appliances under the Atmanirbhar Bharat Abhiyan (Self-Reliant India Initiative). Moreover, India is laying down the red carpet for global manufacturers to set up production units in India.

Modi government has been successful in creating a robust electronics industry. The production of electronics in India has grown rapidly from 29 billion US dollars in the year 2014 to 70 billion US dollars in the year 2019.

India has already been to able achieve some crucial success on this front. Earlier this year, Korea Chamber of Commerce and Industry (KCCI) chairman Yongmaan Park told UP Micro, Small And Medium Enterprises (MSME) and Export Promotion Minister, Sidharth Nath Singh that Korean electronic makers, looking shift production out of China, were keen on investing in the state of Uttar Pradesh.

KICCI is the largest and oldest business association in South Korea representing 1,80,000 members companies of all sectors, and Yongmaan’s remarks, therefore, reflected the larger industry sentiments in South Korea. On his part, Singh had welcomed the KCCI proposal and had also assured that the Yogi Adityanath government would provide the necessary support to the Korean firms moving out of China and establishing new plants in UP.

India has some really ambitious plans for its electronics industry. India’s National Policy on Electronics, 2019 seeks to achieve a turnover of 400 billion US dollars by 2025. It seeks to promote domestic manufacturing and exports and position India as a global hub for Electronics System Design and Manufacturing – (ESDM).

Now, by restricting imports in a key sector like the colour TV industry, India is further driving global manufacturers to approach India. There is a huge market for colour TV sets in India, and global firms will be strongly inclined to set up manufacturing plants in India that cater to Indian and foreign markets.

Ultimately, India wants to establish a strong electronics manufacturing industry on the basis of which special incentive packages will be doled out for high-tech mega projects that require investment in cutting-edge technology like semiconductors and other electronic components.

The National Policy on Electronics, 2019 also proposes incentivising investments in electronic components. India wants to become truly self-reliant in the consumer electronics sector from Research & Development (R & D) in components to the manufacturing of final products. The biggest victim of India’s giant leap is, of course, China which stands to lose out on a humongous consumer electronics market.