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Prices of refrigerators, ACs, coolers, washing machines may rise due to duty price hike: CEAMA


New Delhi, Feb 01: Prices of consumer goods like refrigerators, ACs, coolers and washing machines may rise in the short-term after the government's proposal to increase basic customs duty on components like compressors and motors, industry players said on Saturday.

According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the price escalation would be in the short run but the move would give a boost to domestic manufacturing.

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With respect to the free trade agreement (FTA), the government's move to incorporate a suitable provision in the Customs Act will help boost domestic manufacturing in the long run, said the body which represents appliances and consumer electronic industry.

"The duty increase on certain components like compressors and motors and in some cases on Finished Goods, will help to further develop the manufacturing eco system in the country in the long run and is aligned to the Make in India initiative," said CEAMA President Kamal Nandi.

According to him, the scheme focused on "encouraging the manufacture of mobile phones, electronic equipment and semi-conductor packaging will benefit the electronics industry at large".

While presenting the budget, Finance Minister Nirmala Sitharaman on Saturday proposed to hike the basic customs duty to 12.5 per cent from 10 per cent on compressor of refrigerator and air conditioner.

Besides, the government's continued attention towards skilling especially new-age skill sets such as AI, Robotics will help improve the quality and quantity of skilled labour - critical to industrial growth.

"Additionally, taking electricity to every household by promoting 'smart metering' will be a great step as it will result in a direct and positive impact on the consumer durables sector. Also, this would give consumers the freedom to choose the supplier and rate as per their requirements," it said.

Panasonic India & Sout Asia President & CEO Manish Sharma said government push on enabling technology with regard to development of five new smart cities, setting up of data centre parks, investment in quantum technology, will help establish India as new age economy.

"From a consumer electronics industry perspective, the decision to encourage domestic manufacturing of mobiles and electronic goods in India is a welcome move while a definitive timeline would have helped further boost the industry sentiments. It is one of the vital steps towards establishing a robust, ecosystem for domestic manufacturing while also giving a boost to exports," said Sharma Havells India CMD Anil Rai Gupta said that Union Budget has managed to address some key issues around infrastructure spending, electrification, affordable housing that present significant business opportunity.

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"We particularly see this having a positive impact on the demand roadmap on the electrical and building segment players. Further the allocation of Rs 22,000 crore to power and renewable sector and Rs 27,300 crores for development of industry and commence for year 2020-21 will accelerate growth opportunities for the electrical industry," he said.

Syska Director Rajesh Uttamchandani said the measures in budget will further enhance the exports of networked products.

"Another important step taken is the further push provided by the Government for its smart cities mission. It aims to create 100 cities with state-of-the-art infrastructure that includes intelligent lighting, Wi-Fi access points, leading to enhancement of the quality of life of every citizen while building efficient living spaces for future generations, " he said.

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