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LCD (LED) TV War: Sony vs. (LG + Samsung + Videocon) – FTA (Free Trade Agreement) Debate

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LCD (LED) TV War: Sony vs. (LG + Samsung + Videocon) – FTA (Free Trade Agreement) Debate

Issue – Disagreement over FTA (Free Trade Agreement)

LG, Samsung and Videocon, major players of consumer electronics, have left the competitive rivalries behind and are now collectively putting pressure on the government to stop their main rival Sony from importing flat-panel television sets from Thailand and ASEAN countries. Companies like Sony generally import TV sets under free trade agreements. However, LG, Samsung and Videocon argue that such imports do not comply with ‘nil’ or concessional duty norms.

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For this reason, LG, Samsung and Videocon, have written and made representation to the Ministry of Commerce, Ministry of Finance, Ministry of Communications and IT. LG, Samsung and Videocon, through the apex industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA), have conveyed to various ministries that Japanese companies like Sony and Toshiba do not fulfil the value addition norms specified under the free trade agreements (FTAs) and yet enjoy nil or concessional duty, creating an uncompetitive business environment for domestic manufacturers. It is interesting to note that at present, CEAMA is presided by Mr. Anirudh V. Dhoot, Director, Videocon Industries Ltd.

The ASEAN–India Free Trade Area (AIFTA) is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and India. The free trade area came into effect on 1 January 2010. India hosted the latest ASEAN-India Commemorative Summit in New Delhi on December 20–21, 2012, and subsequently, the free trade agreement (FTA) on services and investments was passed.

Within the purview of AIFTA, India’s main exports to ASEAN include Petroleum products, Oil meals, Gems and jewelry, Electronic goods, Cotton yarn and wool, Machinery and instruments, Drugs and pharmaceuticals, Inorganic, organic, and agro chemicals, Dyes and intermediates etc., whereas ASEAN’s main exports to India include Coal, coke, briquettes, Vegetable and petroleum oils, Electronic goods, Organic chemicals, Non-electrical machinery, Wood and wood products etc.

Since this issue touches upon various parts of law and international treaties, it will be interesting to observe the government’s response. It can also be anticipated that the companies (LG, Samsung & Videocon) may want to use Indian Competition Act as they have contemplated that Sony’s present practice results in uncompetitive business environment.

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Contributors: Prity Khastgir and Rahul Dev 

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