Report: India's Excise Duty Increase May Hurt Major Appliance OEMs; Less Impact on Small Appliance Makers Mar 19, 2012

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India's budget intends to up excise duties by 2%, and a report in The Hindu Business Line said that may spell trouble for Indian appliance makers.

The report by Rajalakshmi Sivam said slow demand for major appliances has already hurt OEMs such as Voltas, Whirlpool India, and Hitachi. Further price increases in majors has the potential to further depress consumer sentiment and further slow appliance sales. Instead of raising end product process, major appliance producers may instead chose to absorb the increased cost, which would, naturally, undercut earnings.

The article noted that small appliance makers have seen strong demand for their products, which may allow them to pass along the excise duty increase to consumers without seriously impacting sales.

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