A firm rupee makes LED TVs cheaper; other appliances costlier on high input costs

Indian consumers will now have to pay less for their LED TVs, thanks to the steep appreciation of the domestic currency against the US dollar. However, other home appliances are dearer.

The Indian rupee has firmed up nearly 5 percent against the US dollar over the last few months making imports cheaper.

A Business Standard report today suggests that even as nearly 50 percent of the components used in TVs and between 60-90 percent in other home appliances are being imported, only flat panel television makers, particularly those dealing in light-emitting diode TVs or LEDs like Sony, Samsung, LG, and Videocon have been able to cut product prices by 4-5 percent.

Manufacturers of other home appliances like refrigerators, and air conditioners, among others, have bucked the trend citing high input costs. In fact, with an almost 8-percent rise in the price of inputs like copper and steel over the last four months, some of them have even raised product prices. These companies were forced to take the brunt of higher input costs due to demand slowdown caused by the cash crunch following demonetisation.

Even now, these home appliance-makers have only partially passed on the increased input costs fearing a hit on demand, particularly for summer friendly products like refrigerators and air-conditioners. Nearly 70 percent of sales of air cooling products and 33 percent of refrigerators happen during the summer months.

Implementation of the Goods and Services Tax (GST) could also prove to be a trigger for some changes in product prices, most likely for the worse. Under GST, most consumer durables are expected to move to the 18-percent excise slab from 12 percent now. However, in case some products also get categorised for peak rates of 28 percent then those products could get even costlier.