NEW DELHI - India has scrapped a tax on imports of open cell TV panels, used to make television displays, in a move likely to boost television manufacturing in the country and counter incentives offered by nations such as Vietnam.

New Delhi had charged a 5% import tax on open cell TV panels, which was a factor in Samsung Electronics' decision last year to shut its TV production unit in India and move production to Vietnam.

Indian Prime Minister Narendra Modi's government is keen to position India as an attractive electronics manufacturing destination at a time when growth in India has slowed sharply, and Washington and Beijing are engaged in a drawn out trade war.

The dispute between the United States and China has led to higher tariffs on goods worth tens of billions of dollars and disrupted global supply chains, prompting companies to look at other countries to escape higher tariffs.

Amid suggestions that India is late to capitalise on the trade war, ministries have been asked to submit policies and incentive structures to the country's foreign investment promotion agency, Reuters has previously reported. Nine sectors including electronics, autos, pharmaceuticals and telecoms will be targeted.

The move to scrap the tax on open cell panels is a step in the right direction, said Vikas Agarwal, the India head of OnePlus, a Chinese firm known for high-end Android smartphones.

"TV is the next big focus for us. Any incentives or benefits are good for us," said Agarwal, whose firm is seen making a foray into television sales in the country.

The federal government's decision would also provide respite to local TV manufacturers, which have been hit by cheap imports from Vietnam, said Manish Sharma, CEO of Panasonic India, the fourth biggest TV manufacturer in India.

"The move will allow us to pass the (cost) benefits to the end-consumer, which would mean an about 3-4% reduction in price, thus providing the necessary thrust to the market," he said.

(Reporting by Sankalp Phartiyal; editing by David Evans and Jason Neely) ((sankalp.phartiyal@thomsonreuters.com))