UNION BUDGET 2016-17 REACTION: SECURITY INDUSTRY

Union Budget 2016-17 has come up with landmark notification for Electronic Security Industry specially for CCTV. Basic Custom Duty (BCD), Counter Veiling Duty (CVD) and Special Additional Duty (SAD) on all the components of CCTV Cameras, IP Cameras, Digital Video Recorder (DVR) and Network Video (NVR) have been removed. Excise duty on finished equipment would be 4% if input credit is claimed. This move is going to promote manufacturing of surveillance equipment in India in a manner similar to that of Mobile Phone Manufacturing. It will make product cheaper and affordable in the market from the consumer's perspective. It brings an opportunity for existing players and encourages new entrants to make their presence in this segment and cater to the audience more efficiently. This move in coming years will make way for other equipment like Alarm system, Access control, etc. to be included in this list.As of now a very little manufacturing is happening in India, mostly assembling is being done.With these changes assembling too would be promoted, if government brings in duty on assembled PCB as has been done for Mobile phones in this budget after giving relaxation on SKD for an year. Once this happens, then all assemblers would be forced to move to manufacturing in CKD, which would not be easy. This will definitely make way for manufacturers from China and other parts of the world for setting up manufacturing shops in India.

The products would be become affordable for end users. It would bring the CCTV product within reach of large number of home users and small offices who have ignored their security needs because of the pricing.

With increasing focus on Electronic Security Industry, there lies huge opportunity in times to come. The government has been initiating important steps to boost electronic manufacturing in India and hence the first major step came in the form of CCTV Cameras inclusion in generic product category for PMA Policy of Deity. And then followed up by addition of Electronic Security Equipment like CCTV, Access control, Alarm system, etc. as separate category in amended MSIPS Policy of Deity under National Policy on Electronics and further clarification on PMA Policy for CCTV and Alarm system stating 100% preference to be provided to domestically manufactured products. The Union Budget 2016-17 notifications has finally brought Electronic Security Industry in main league.

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