Telecom sector bats for domestic manufacturing

The Dollar Business Bureau The Ministry of Information technology and Communications, in its recommendations to the upcoming budget, has pitched more for the domestic manufacturing of telecom equipment. The Minister has said the recommendations made would help in curbing the widening trade deficit in the Telecom Sector, say the sources. The Ministry has also asked the Finance Ministry to provide tax incentives to manufacturers of the telecom equipment and for setting up the basic infrastructure such as mobile transmission towers. It said in its recommendations that this tax incentives would help in lowering the costs and facilitate the affordable services. The Ministry further asked for the postponement of the excise duties to the domestic manufacturers to seven years, say the sources. Earlier in January, the Cellular Operators Association of India (COAI), in its pre-budget recommendations, had also said that the telecom goods manufactured in Special Economic Zones be exempted from Customs Duty. It said that these manufacturers, including foreign companies would meet the Make in Policy requirements. The COAI report further said that such exemption would lower the network costs and would contribute to the government’s Digital India initiative. The government is also looking at the ways to reduce it net foreign exchange out go. According to the sources, the telecom equipment total imports in 2013-14 stood at around Rs 69,516 crore against exports of Rs 20,475 crore. In this regard, the Ministry suggests that the domestic manufacturing will reduce the equipment costs and would help the  government in meeting the deficit targets.  

This article was published on February 6, 2015.