“The price rise for compressors can come as a setback for the industry but, we are keeping a close track of the price impact,” said Manish Sharma, president and CEO, Panasonic India and president, Consumer Electronics and Appliances Manufacturers Association.
According to Vinit Agarwal, director of Aisen India that sells high-end speakers, it is not clear as to what extent these duty hikes will effect local manufacturing and speaker prices are set to go up soon as most of the high-end products come from China. Other products like compressors for ACs and refrigerators and top loading washing machines are mostly being imported from China, too.
The duty hikes on large appliances comes at a time when the industry is reeling under margin pressure. The government had increased duties on a fleet of products twice — in December and February — that has already pushed prices up. Moreover, falling rate of the rupee has pushed companies
into the corner. Since September last year, the industry has observed at least three rounds of price hikes with the latest one being in July. Another round of price hikes will push up the increase to 15-20 per cent since last September.
Air travellers’ plans will also be dampened. Five per cent duty on aviation turbine fuel will put additional burden on airlines, the country's largest domestic airline IndiGo said. Among the domestic airlines, IndiGo imports jet fuel, though its total import is estimated to be less than 5 per cent of its total fuel consumption.
Domestic ATF pricing in India is based on import parity pricing principles. There is no clarity yet whether domestic pricing will see a revision on account of the custom duty. “The silver lining is that with the peak season kicking in, we are likely to see an increase in prices and strong loads, providing relief to airlines,” said Sharat Dhall, COO (B2C), Yatra.com.