Calcutta, Sept. 21: The domestic telecom equipment manufacturers are lobbying with the government to introduce a zero-duty structure to spur growth. Around 120 manufacturers will meet in the national capital on September 25 under the aegis of Telecom Equipment Manufacturers’ Association (Tema) to discuss the issues affecting the Rs 15,000-crore industry.
“The government policy has facilitated the entry of foreign suppliers in the market without a commitment of setting up manufacturing units,” says . K. Goyal, president of Tema. “The domestic industry did not get enough time to groom itself for such stiff competition.”
Goyal agrees with those lobbying for implementation of zero-duty for the hardware industry. “The government has ensured the growth of the software industry and suffered $2.6 billion in taxes on account of sops. Similar concessions to the hardware industry will result in losses around Rs 500 crore, but it will prove profitable in the long run,” he said.
The present inverted duty structure makes the import of telecom equipment cheaper than finished domestic goods. Import duties on components and raw materials are 10 to 25 per cent, while finished goods attract a duty of 15 per cent. To add to the manufacturers’ woes, India is also committed to a zero-duty import structure in compliance with WTO norms by 2005.
The lobbying has, however, paid off with the government directing both BSNL and MTNL to reduce the time-period for the tendering process to 20 days. Advance information on tendering will also be available on the company’s website.
“Both companies procure all their equipment except the GSM switches from the domestic market,” says Goyal. “However, private operators buy only 10 to 20 per cent of their requirement and import the rest.”