The Indian government has raised the import tariff on raw materials to 30%. Prices for aluminium ore and concentrate may rise since they are utilised in the production of televisions and air conditioners. Manufacturers are also concerned about the impact of the Russia-Ukraine conflict on costs.
April 1 is not just April Fools’ Day. For Indians, it is the day when the new Budget 2022 comes into effect. Finance Minister Nirmala Sitharaman, during her speech in the Parliament in February, announced a 30 per cent import duty on raw materials, specifically aluminium ore and concentrate.
Since these raw materials are used in the making of white goods such as televisions, air conditioners, and refrigerators, the cost of production is likely to go up, and this may, consequently, result in high prices.
The supply of aluminium ore and concentrate to India through imports will now be taxed at 30 per cent, a move that is likely to affect the appliance industry at large. You can expect price hikes in the cost of newly manufactured appliances, such as televisions. Since aluminium is an important raw material used in the making of compressors, the prices of air conditioners and refrigerators are also expected to go up.
The hike in import duty on raw materials will have a direct impact, but manufacturers in India believe that the ongoing war between Russia and Ukraine and the lockdowns in China as a response to the reemergence of Covid may influence the costs of electronic goods in India by up to 7 to 10 per cent.
An IANS report quoted Avneet Singh Marwah, CEO of Super Plastronics Pvt. Ltd, saying, “This is an alarming situation for the industry as there is a price increase in commodities like metal and petroleum. As a result, there will be an impact of 7-10 per cent (in prices of electronic goods) next month.”
The supply chain of electronics started coming back to track after the restrictions owing to the pandemic were relaxed in India, as well as the countries with the world’s biggest manufacturing hubs. But manufacturers are apprehensive that the prolonged war between Russia and Ukraine will impact the industry significantly.
That is because Russia and Ukraine are the world’s largest producers of key minerals and raw materials used in the making of chips and other components. The electronics manufacturing industry is still reeling from the global chip shortage only to find itself stuck in a situation worsened by the ongoing war.
They are the largest producers of some key minerals used as raw materials for manufacturing of chips. Chips have already been in shortage through the last 12 months and this further compounds the problem,” Anand Dubey, CEO, Indkal Technologies Pvt. Ltd told IANS.
In other news, the government also announced that any cryptocurrency transaction from April 1 will attract a 30 per cent tax per transaction – a move detested by crypto investors in India. But, while this may come as a burden to investors, this rule may be a step in the direction of the legalisation of cryptocurrencies in India.
Published By : Ankit Singh
Edited By : Khushi Thakur
