Forget ‘Phoren’, Almost All TVs Sold In India, Are Now ‘Made In India’
Best-selling brands like Xiaomi and Samsung, as well as premium brands like Sony, are all assembled in India-based plants.
A single contract manufacturer — SSPL — makes TVs for four big global brands.
The key component — the LED panel — may soon be mass-manufactured in India.
For almost 20 years, right up until 2010, anyone standing in the arrival area of Kerala’s three main airports, was guaranteed a sight unique to the state — a continuous stream of passengers returning from Persian Gulf countries, staggering out of the customs inspection area, with a huge carton perched on their trolleys.
The labels revealed the contents: an oversized “flat screen” television set, most often from Sony or Panasonic. While their neighbours made do with an old-fashioned CRT type television set dating back to the 1990s, the Middle East Malayalee, took great pride in bringing home to his loved ones in Chavakkad or Malappuram, a 48-inch LCD TV that announced to the world their Gulf connection.
Not any more. Even at the duty-free prices of Dubai, Abu Dhabi or Sharjah, bringing a large TV, back no longer makes sense, especially as the government has now placed TV sets in a restricted category and slaps a 20 per cent customs duty even on sets brought as personal baggage.
More importantly, the favoured brands like Sony, now assemble most of their smart TVs except a few top-of-the-line models, in India — and export them to the SAARC and Middle East countries.
So, chances are that 56-inch 4K LG LED TV you carted all the way from Riyadh, after paying the hefty duty, was assembled in a factory in Pune and could be had, cheaper at any local TV showroom.
One side effect of the prolonged Covid-induced shut downs has been a sharp rise in the demand for large screen TV sets. In early 2021, the shipment of TVs in India was 46 per cent better than the previous year and when it came to smart TVs — which can be connected to the Internet — the growth was an extraordinary 65 per cent in the April – June 2021 period according to market monitor Counterpoint.
The craze for ‘phoren’ may be a thing of the past — as almost every major international brand is now assembled in a plant in India. And feature-wise there is little to distinguish the global brands from the traditional Indian TV brands.
Aggressive pricing all round has ensured that this festival season, the Indian customer is offered unprecedented choice and range of TV sets, across all price points from the basic non-smart LED TV for Rs 6,000 to giant Wall TVs costing Rs 2 lakh or more that would not be out of place in a film star's home-theatre.
Carrot and stick policy pays?
In a sense, the government can chalk it up as a success for its atmanirbhar thrust, nudging global TV players to ‘make in India’ by a combination of carrot and stick — incentives and import barriers.
But this is as yet, a work in progress and there are some inconsistencies, some fiscal irritants, to be ironed out, before the entertainment electronics industry wholeheartedly embraces the Make in India idea.
Because, let’s be real: dozens of India-based company-owned TV as well as contract manufacturing lines, notwithstanding, Make in India, is largely ‘assemble in India’.
The flat television set today has four constituent parts: “OpenCell” — jargon for the LCD/LED display panel; the motherboard, the semiconductor chips that go on the motherboard and accessories like power supply and sound systems.
The display panel accounts for 60-65 per cent of the total value of the bill of materials. Typically, the LED panel and chips are imported. And even though indigenous sources may be able to fabricate the motherboard and the audio units, few makers find it worthwhile to indigenize them.
In a webinar on the business opportunity for TV makers that the ElectronicsForYou magazine group organized earlier this year, the head of one of India’s leading TV makers, was brutally frank when he said, “The value addition that is happening in India is in packing boxes, the cabinet, the bezels and maybe in the accessory bags and polypropylene bags.”
But this is changing — fast. Here is a quick check on who is doing what:
Samsung has had an on-off policy. It makes almost all the TVs for the Indian market, in India at the contract manufacturing lines of two companies: the Indian-owned Dixon Technologies which has 8 plants in 3 states, UP, Uttarakhand and Andhra Pradesh and the Chinese venture Skyworth, in Hyderabad.
But it briefly reverted to import of finished TVs when the government’s import policies for crucial components made it unviable to assemble in India.
In October 2019, the import duty on open cells was slashed from 5 per cent to zero, only to be restored to 5 per cent in October 2020. Similar uncertainties have dogged the import of some electronic sub-assemblies.
Arguably the largest-selling TV brand in India — Xiaomi’s MI TV — began making many of its TV sets in the Tirupati, Andhra Pradesh, plant of Dixon in 2019. Another China brand, OnePlus, announced in June 2020, that it had entrusted its 32-43 inch TVs to Skyworth.
LG is one of the first global brands to make in India. Its own plant in Ranjangaon, on the outskirts of Pune, Maharashtra, started assembling TVs way back in 2007 — and quickly earned an accolade as the most efficient of the Korean company’s 30 plants worldwide.
Today it makes the most advanced TVs based on Organic Light Emitting Diode or OLED technology. And it had a canny sense for what its Indian customers wanted: it offered a model called "Mosquito Away" with a built-in electronic mosquito repeller!
Taking on the top-end
In 2006, Devita Saraf, scion of the Saraf family which pioneered computer production in the country under the Zenith Electronics brand, made a foray into the high end of entertainment electronics, founding Vu Technologies in the US, and setting up a TV manufacturing base in Bhiwandi, near Mumbai.
Best-Doubling as design head, Devita brought in top Indian designers like Tarun Tahiliani and arty inputs like Swarovski, to make the TV set a work of art. The Vu Masterpiece QLED TV 85-inch TV comes with a built-in home theatre and an Armani Gold finish, creating an upmarket brand for wannabes who hitherto had to shop abroad for such eye catchers.
One international brand — the Japan-based Panasonic — has a long electronics manufacturing history in India, making audio electronics products from 1996. It is known to have made its own LCD panels for TV, inhouse.
And the latest to start an Indian TV manufacturing programme, is the Chinese state-owned Hisense, which has announced that it plans to set up a plant in India with a capacity of 2 million TVs, within 2 years.
From PC to TV
Compaq was a respected brand for desktop PCs and laptops before it was acquired by Hewlett Packard in 2002 who killed the brand in 2013.
Now it has risen from the dead as a TV brand, that was launched in India last month under licence from HP.
Its Indian partner is Ossify, who invested over Rs 200 crore to set up a plant in Kundli, Haryana to locally make the Compaq TVs. The Compaq flagship TV HEX 65 brings a special audio technology from Mimi, based in Germany, which adjusts the TV volume to the hearing ability of the user.
Original Indian players
Against this onslaught of global brands assembling in India, a handful of India’s TV pioneers have held their own: most of them responded to the rapid spread of colour television in the mid-1980s.
Onida which dates to 1981 and was best known for its catchy slogan: “Neighbour’s envy, owner’s pride”, set up plants in Wada, Maharashtra and Roorkee, UP and still has its loyal following.
As does Videocon which set up its first plant in Aurangabad, Maharashtra, in 1985 and is credited with offering the first colour TV set in India.
T Series, better known for its audio music cassettes of yesteryear; Micromax which made a name for its PC products and Intex, which has been around since 1996, have all managed to survive and compete with the global brands, by a careful choice of their niche.
One of the oldest indigenous manufacturers of TV in India is Videotex International, which has been around for over 37 years and makes TVs under two brands: Daiwa and Shinco, at plants in Greater Noida, Ludhiana and Himachal Pradesh.
The former has recently introduced enhanced audio sourced from the US-based dbx-tv. While Daiwa is sold through stores, Shinco has an online-only sales strategy.
One manufacturer, four brands
Perhaps the most interesting of the Indian entrepreneurs who sustained the TV business and put their trust in make-in-India, is Noida-headquartered Super Plastronics Pvt Ltd (SPPL) founded in 1990 and currently making TV sets at three plants — Jammu, Una (Himachal Pradesh) and Noida (NCR/ UP).
The company makes television sets for some of the best-known global brands including the France-based Thomson and the US-based Kodak, the latter better known for its glory days as a top photography brand.
Then earlier this year, SSPL announced a tie-up to make smart TV sets under the well-known German audio brand, Blaupunkt. For the current festive season, it has launched a 65-inch 4K Android TV this week.
And to extend its portfolio of contract manufacturing partners, SPPL has just launched 5 “Made in India” TVs for that old and respected American brand, Westinghouse.
To continue serving such global brands with world-class manufacturing in India, SSPL has made an investment of Rs 300 crore in an R&D centre to exploit next generation Artificial Intelligence (AI)and Internet of Things (IoT) in its processes.
By the end of 2021, SSPL hopes it will capture at least 10 per cent of the Indian TV market with its four brands.
With such a plethora of options available for all users, from families investing in their first TV set to the rich and famous who had the luxury of a home theatre, the Made in India TV has now become an aspirational product for millions.
And with an Internet connection available on almost every smart phone and affordable for many homes, the day when every TV is a smart TV is not far off.
It remains to be seen if schemes like Production Linked Incentives (PLI), push more TV makers into creating a more viable ecosystem for indigenous manufacture, where the bulk of sub systems including the display panel are made in India.
Perhaps it needs the government to listen to the concerns of both industry and consumer and put long term viability above immediate revenue mobilization.
For example, who decides that a 10 kg front loading washing machine was a necessity and hence is taxed at 18 per cent GST, while a 40-inch LED TV was a luxury and should be taxed at 28 per cent?
Meanwhile, push has finally come to shove: In June this year Economic Times reported that the China-based TCL Group’s company, China Star OptoElectronics (CSOT) will start manufacturing display panels for TV and display modules for mobile phones at a 280,000-sq meter facility in Tirupati ( AP).
The TV display panels will range from 32-inch to 75-inch and will engage five of the 11 production lines.
It makes a lot of sense for TCL to manufacture the LED TV panels here. And not just because India is now the world’s number 3 market for TV after China and the US.
Xiaomi and Samsung are already big customers of TCL and since they are already assembling their TVs in India, sourcing the display panels inside India reduces the supply chain.
It does look, in view of all these developments, that TV may be the next big industry where make-in-India makes perfect sense.
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