Televisions To Cost 10% More From January As Freight Rates Pinch

Consumers may have to shell out more to buy televisions from January as manufacturers grapple with rising shipping costs, amid currency volatility and supply chain disruptions. These issues, which have lingered since the pandemic, have already led to a price increase of 20–30% over the past two years. Now, the companies are expecting to take another 10% hike to offset these escalating costs.

The ongoing geopolitical tensions have led to a 30–35% jump in freight rates, said Avneet Singh Marwah, chief executive officer of Super Plastronics Pvt., the exclusive brand licensee of Thomson and Kodak. "We are also witnessing an all-time low of the Indian rupee against USD, further adding to the cost burden. So, there will be definitely a price increase of around 10% for smart TVs starting 2025."

Videotex International, a contract manufacturer of smart TVs for brands such as Lloyd, Realme, Toshiba and Daiwa, is also closely monitoring the fluctuations in material and shipping costs. "Depending on market conditions, we anticipate increases of 7–10%," said its director, Arjun Bajaj.

Marwah further added that the Chinese government is likely to withdraw the monetary support given to open cell manufactures from January. "This will further result in price rise of TV panels."

About 60–65% of the price of a television is the cost of the open cell panel that makes the screen. At present, India lacks local manufacturing of open cells, so it relies heavily on Chinese companies like BOE Display and TCL CSOT, besides Taiwanese firms Innolux and AUO, and Hong Kong-based HKC. These raw open cells are imported and then assembled in India for use in TV sets.

In the upcoming budget, the industry hopes the government will scrap basic customs duties on open cells for TV panels—which could significantly lower the price of large-screen TVs. In 2023, these duties were halved to 2.5% to boost the domestic industry. The government had also granted a one-year customs duty exemption on open cells in 2019 at the request of TV makers facing a demand slump.

Counterpoint Research estimates India’s TV market to decline 3% year-on-year in 2024 as companies reduced shipments to manage inventory levels.

"Additionally, there has been a decline in shipments of smaller-screen TVs, which are typically volume drivers for the market, further impacting overall market performance," said Counterpoint's senior analyst, Anshika Jain.

After a subdued first half, Jain expects a recovery in the second half due to multiple sale events and festive offers. But that may not be enough to boost sales. "The expected price hike could further reduce shipments, especially for the budget and the entry-level segment."

Bajaj anticipates a positive outlook in the second half of FY25, with the company strategically shifting towards promoting larger-sized products. In Q3 so far, he said that the industry has grown 10–20% versus last year. "However, this growth needs to catch up to the higher expectations set earlier."