NEW DELHI: The government’s recent move to waive customs duty on import of some raw materials used by the steel industry like coking coal and ferronickel in a bid to lower the input cost for the domestic industry comes as a piece of positive news for the consumers.
Industry players in the home appliances industry say the move is well-timed and will help reduce the cost of home appliances. Steel is used in the manufacturing of a majority of kitchen appliances and a reduction in customs duty on import will help bring down the cost of manufacturing, which many companies have been struggling with due to soaring commodity prices.
Sunil Agarwal, Director of kitchenware manufacturer Vinod Cookware said the cut-off lowers manufacturing costs for producers and eventually tames the prices of final goods for consumers.
As for Vinod Cookware, Agarwal said, this tax reduction reduces the manufacturing cost for high-demand products like Stainless Steel Pressure cookers and SAS metal cookware. He, however, adds the slash in this area may be offset by the hike in transportation costs and other raw materials.
But In the long run, he said, “the reworked custom duty will make high-quality products accessible to customers at discounted and affordable prices, a key deciding factor while purchasing home appliances.”
Kamal Nandi, business head and executive vice-president at Godrej Appliances, also believes the move would help bring down input costs.
However, he said, due to inventory available with steel mills and the quarterly contracts with customers, the price reduction would be applicable in the second quarter of FY23. “The appliance manufacturers are in discussion with steel manufacturers to assess the quantum of reduction.” India has also hiked up their export tax on iron ore up to increase the domestic availability of steel. Vishal Akhauri, Business Head, Consumer Durables, Surya Roshni said frequent Increases in commodity prices have had an impact of around 20% rise as compared to pre-Covid prices.
“This has delayed the entry of new technologies, including energy saving offerings, due to unstable market prices. Recent duty cuts will help to cool off the overheated inflationary trends.”