Broadband India Forum (BIF) of the industrial sector approached the telecoms service and the finance ministry, seeking a reversal of the increase in import duties on components and PCBAs, that had recently been implemented in the budget. The BIF has written to the Government urging that these tasks to be withdrawn and urged that the duty exemption for telecommunications components be continued. “Since 2017 certain exemptions covering different items have been granted under customs notification. Some customs duties relating to various components were however withdrawn on February 1. As a result, the cost of making Indian products is estimated to rise by 5-6% because many components are imported and are not produced here”, BIF President TV Ramachandran told. In a recent letter to the Secretary of Finance, the BIF expressed concern that the increase in the duty of its components caused significant growth in the share due to the notification. BIF has told the Government that “This will probably completely compensate for the potential benefit of the excellent PLI incentive system (Production-linked incentive), which the Telecom Department announced on February 24, 2021.” The industry has made two sets of statements on the matter – on 22 March and before 1 March. Drawing attention on import duty issues. BIF claimed, “This would make the government’s push to make India more competitive than equivalence imports from FTA countries under the Atmanirbhar Bharat Mission and also make telecommunications products produced in India uncompetitive.”
BIF highlighted that important investments in the sector depend on the PLI policy being launched, and urged the government to tackle the problem. BIF previously referred to the Budget notification in its letter dated 1 March, stating that the telecoms industry is liable to pay basic customs duties (BCD) and social welfare surcharges (SWS) for inputs of raw materials for telecommunications equipment which fall on the list. “The customs duty payable after removal of this exemption would result in an increase in the cost of making Indian Telecom products, ranging from 8.25% to 16.5%” BIF said. In addition to remove the incentive for exports, the duty increase will have an impact on cost competitiveness of Make in India Products, in spite of government pursuit of India-based Make-in- India, Atmanirbhar Bharat mission, telecommunications products which are being made in India are now more expensive than those imported from the FTA countries as a result of the recent move, according to the BIF. It also added that import for telecommunications manufactures of the Printed Circuit Board Assembly (PCBA) now also “suffer” a duty of 11%. PCBA is used for telecommunication products such as telephone, base stations, controllers, etc. “While the government is aiming to promote such an unpopulated PCB’s local manufacture, at this time we see that the type of unpopulated PCB we need is unavailable in India for the telecommunications products.” In order to enable the supply chain resilience, the industry body requested that the government continue with the PCBAs’ duty exemption available. “This could be removed after Indian producers develop unpopulated PCBs’ required capacity and capability, “said the BIF. The BIF has requested the government to look at these issues favourably, so that the taxation system “will be stable, rational and provides avenues for making India products competitive both in the local as well as in the global marketplace, as manufacturers making in India for domestic consumption and exports is provided.”
“This objective will be significantly affected by the high component and other input duties. We urge you to withdraw these obligations and demand that the duty waiver for the telecommunication components continue as indicated, “it said.
