Prices of LED bulbs and lights may see a rise of up to 10 per cent from March as the manufacturers face supply shortage of electronic components due to the coronavirus outbreak in China, industry body ELCOMA said.
Like mobile and electronics industry, the domestic lighting industry is also affected due to the coronavirus epidemic as the supplies of electronic components are hit due to a shutdown in China, Electric Lamp and Component Manufacturers Association (ELCOMA) India said.
This may impact the connected lighting solutions and professional lighting segment more as it has larger share of imported components.
"With this coronavirus, we are starting to see a big shortage of electronic components as chips. The demand supply equation is not working," ELCOMA Vice President Sumit Padmakar Joshi told PTI.
According to him, while manufacturing an LED bulb in India, over 60 per cent of the components, which are mechanical in nature are sourced locally, while around 30 per cent, which are called electronic drivers including chips, are imported from Chinese vendors and are in short supply now.
"I do expect that there would be impact on the prices of the lighting products as we are seeing supply constraints here," said Joshi adding "we could have an inflationary impact may be to the tune of 8 to 10 per cent."
Most of the industry players have inventory till February and from March onwards, products with increased prices would be in the market.
"It actually started from January and the industry was able to sustain for one month, hoping that things would get clear but this could (not happen).
"With every passing week, the current inventory has gone down now. We have already started seeing shortage in February itself and I would say that from March onwards, this( products with increased prices) will start coming into the market," said Joshi, who is also Managing Director, Signify Innovations India (formerly Philips Lighting India).
The manufacturers are looking at other destinations like Taiwan, Hong Kong and South Korea for importing components, however, the demand supply equation is still not working.
"As the factories are shut and logistics taking time, those components are in short supply. We also do not see supply regularising till the time situation normalises. The whole value chain has gone for a toss," he said.
When asked whether the prices would come down, if supply from China comes to normal Joshi said:"I do not think it is going to happen in 15-20 days. Factories are open but not running in their 100 per cent capacity and they do not even have proper work force... This would take 3-4 months to normalise and as normalisation happens on the cost side, this pressure should come off."
Joshi also said this is a wake up call for the Indian industry as well to focus more on localisation of components in long term.
"Localisation is the key because our industry is big. There needs to be a long-term solution for electronic components getting manufactured in India not just for lighting but for other industries also," he said adding the government needs to fast-track its Make-in-India initiative.
Founded in June 1970, ELCOMA represents the domestic lighting industry.