The plunge in the Indian rupee was, so far, good news for expat Indians, but it has now started taking its toll.
Non-resident Indians (NRIs) and those on a holiday to the Gulf or anywhere else in the world will no longer be able to carry a duty-free flat panel TV with them back home from next week, with the Indian government imposing a punishing 35 per cent duty on such imports besides other charges.
The sagging rupee has plunged to a fresh lifetime low, under the Rs17-level against the UAE dirham and below the Rs63-mark against the US dollar [Read: Indian rupee plunges to fresh record low of Rs17.26 vs Dh1: Should you remit now?]
Using the declining rupee as a pretext, Indian government yesterday gave in to the long-standing demand of local TV retailers and banned duty-free import of flat-screen television sets by air travellers.
According to Indian government estimates, more than 1 million TV sets were brought into the country last year, with Dubai, Bangkok and Singapore as the primary sources.
Earlier, NRIs and other airline passengers could carry one piece of flat TV (plasma/LED/LCD) for personal use, worth up to Rs35,000 (Dh2,100) as part of their baggage allowance, without incurring any customs duty on the same.
However, from next Monday (August 26), that will no longer be the case as India has issued a moratorium on the scheme, citing the declining Indian rupee. As per the new rules announced yesterday, passengers will have to pay a 35 per cent duty and other charges, officials said.
As Emirates24|7 reported in June this year [Read: No Samsung India warranty for TVs bought in UAE], electronics retailers in India have long been complaining about duty-free TV imports from the UAE and other countries as such imports offer major price discounts compared to retail prices in India.
According to reports in the Indian media, Samsung India had been one of the most vocal critics of the free TV allowance policy, with R Zutshi, past president of industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) and deputy managing director, Samsung India, estimating that parallel imports of flat panel TVs accounted for between 10 and 15 per cent of the market in India.
According to him, the flat-panel TV market was as big as 3.7 million units in 2012, and is estimated to grow to over 5 million units in 2013.
In June this year, Samsung removed free international warranty on television sets imported from the UAE and a few other countries in an effort to protect dealers there against bulk and parallel imports.
The communication from Samsung India to retailers stated that that measure was be the first in a series of measures the Korean giant was going to take to protect Indian traders.
“As you know, India receives a lot of parallel imports of panel televisions from countries such as Thailand, Singapore and Dubai etc. As a first step in addressing this problem, we are pleased to announce that India has been removed from International Warranty Policy for Samsung Panel Televisions.
“Hence, standard one year free warranty with free installation support will no longer be applicable in India for any Samsung Television imported from Thailand, Singapore or Dubai. This policy has already come into effect and we wanted to inform you of the same,” said the memo.
The continuously declining rupee is a symptom of a weak Indian economy, but until this latest salvo, there had been no negative impact on NRIs working in the Gulf and elsewhere.
The Indian currency is down more than 18 per cent in less than four months since the beginning of May 2013, providing expat Indians further reason to remit record sums home and also evaluate fresh investment opportunities in their home market, especially real estate.
The rupee was yesterday officially crowned the worst performing Asian currency, falling past the Australian dollar and the Japanese yen.
The rupee, which has seen a plunge of more than 15 per cent since the beginning of the year, is now in competition to become the world’s worst performing currency this year, with only the Brazilian real (down 16.64 per cent YTD) and the South African rand (down 20.30 per cent YTD) faring worse than the Indian rupee.