Consumers may have to pay more for products such as cars, two-wheelers, televisions, refrigerators and air conditioners from April, as manufacturers prepare to raise prices due to a sharp increase in raw
material and logistics costs.
According to a report by The Economic Times, prices of several consumer products could rise by up to 5-6% from next month, driven by higher costs of key inputs such as plastics, resins and polymers, along with rising freight rates and the weakening of the rupee amid geopolitical tensions in West Asia.
The report said automakers are considering price hikes of around 2-3%, while consumer electronics and home appliances could become 5-6% costlier, as these products rely heavily on plastic-based components.
Luxury carmakers Mercedes-Benz and Audi have already announced price hikes of about 2% effective April 1, while mass-market carmakers are finalising their revisions.
Apart from automobiles and electronics, prices of shoes, synthetic fibre-based apparel and decorative household paints could also rise by up to 9-10%, the report said.
According to the report, industry executives said that while the price hikes may erode some of the demand gains seen after recent GST reductions, companies have limited options as supply chains have become increasingly volatile.
“A price hike is inevitable,” Kamal Nandi, head of the appliances business at Godrej Enterprises, as quoted by ET as saying.
“We will increase prices from April, possibly by 5-6%,” Nandi said, adding that input costs have risen sharply in recent weeks, according to the report. “Every time we speak to our plastic suppliers, they are raising prices and are unwilling to commit to long-term contracts.”
According to the report, the Automotive Component Manufacturers Association (ACMA) has also informed the government that imports of key raw materials such as chemicals, synthetic rubber, aluminium scrap and petrochemical-based inputs like polypropylene are facing delays and cost escalations due to shipping disruptions.
Industry executives said prices of crude derivatives including plastics, resins and polymers, such as polyethylene and polypropylene used in packaging, have risen by up to 25% in the past month. Polyester staple fibre prices have also seen a similar increase.
At the same time, international freight rates have risen 7-10%, increasing the landed cost of imported raw materials and components. The rupee has also weakened by around 2% against the US dollar, adding to cost pressures.
Paint maker Berger Paints India plans to increase prices by about 5% on average from March 25 for solvent-based products, waterproofing emulsions and industrial paints, ET reported.
