Impact of import duty hikes: Festive offers by companies to dry up

In a bid to curb import of household appliances and electronic products, primarily from China, the Central government has hiked the basic customs duty on these items from midnight. This is likely to force firms to raise the prices of consumer durables as imported components will get costlier.

The news is a dampener ahead of the festive season. Household products like refrigerators, ACs, washing machines with a capacity of less than 10 kg and audio speakers will be hit the most. “This is bad news,” said Eric Brigranza, president, Haier Appliances India. Kamal Nandi, business head and executive vice-president, Godrej Appliances, said it will impact all categories and ACs will take the biggest hit. “Indoor units of ACs are mostly imported. The GST rate for ACs is also highest. This is a double whammy,” he said.

B Thiagarajan, joint managing director, Blue Star, said, the firm was contemplating a round of price hikes in October due to surging cost of imports, thanks to the depreciating rupee. But now, it will have to look into its inventory level. “There could be a second round of price hikes in December-January,” he said.