The Telecom Equipment and Services Export Promotion Council (TEPC) focuses on promoting India as an investment destination for telecom equipment manufacturers. It supports telecom equipment exports to developing countries. In an interview with tele.net,
In an interview with tele.net.in R.K. Pathak, secretary, TEPC, talks about the challenges faced by Indian telecom manufacturers and the initiatives taken to support indigenous manufacturing in the country.
Excerpts?
How has the Indian telecom equipment manufacturing industry grown in the past two to three years?
Over the past two years, the domestic demand for telecom equipment has been low, but there has been an increase in export demand. The government is taking steps to bring component manufacturers into India. It is crucial to establish the entire manufacturing value chain in the country to ensure that the domestic demand for telecom equipment, especially wireless systems, is met from indigenous sources.
What have been the key growth drivers?
The growth of the telecom equipment industry depends on the increase in the subscriber base. The next level of sector growth will be driven by the broadband segment. The government has set a target of providing 175 million and 600 million broadband connections by 2017 and 2020 respectively. To establish the infrastructure required to achieve these targets, it has launched the National Optical Fibre Network project. The government is investing $4 billion in the project while the remaining investment would be provided by private players.
What are the key challenges facing the Indian telecom equipment market?
Indian telecom equipment manufacturers face certain disadvantages vis-?-vis foreign vendors. The government is committed to addressing such inequalities through the National Telecom Policy, 2012 (NTP, 2012) as well as the National Policy on Electronics. It has notified certain schemes including incentive packages and electronic cluster development to support domestic telecom equipment manufacturers. Further, there is a focus on bringing together a few key domestic manufacturers and providing funds for joint research and development (R&D) to drive industry growth.
What has been the impact of the increasing competition from foreign vendors on domestic telecom equipment manufacturers?
Indian telecom manufacturers have to compete on parameters like price and quality with foreign vendors. The country has a large talent and skill base to manufacture world-class products. In fact, the entire architecture design development in the telecom equipment space is being driven by Indian players. Domestic manufacturers are capable of supplying high quality telecom equipment to developing countries. One of the major issues for Indian telecom manufacturers has been the non-availability of funds for R&D investments. In the Twelfth Plan, the government will provide soft funds to Indian telecom manufacturers.
What is the short- and long-term outlook for the equipment manufacturing segment?
The NTP, 2012 has set various milestones for the next few years. These include meeting 60 per cent of the telecom equipment demand from indigenous sources with a value addition of 45 per cent by 2017, and 80 per cent of the country?s telecom equipment requirement with a 65 per cent value addition by 2020. The government is committed to achieving these targets by supporting manufacturing and investing in R&D.
What steps are required to reduce the country?s dependence on telecom equipment imports?
The government needs to address the issues Indian manufacturers face vis-?-vis foreign vendors in order to reduce the dependence on imports. India has the advantage of cheap labour availability. Therefore, efforts should be made to not only make the country self-sufficient in terms of meeting its telecom equipment requirement but also to establish a significant export market.
What have been the major achievements of TEPC in the past year? What are the key focus areas going forward?
Over the past year, the organisation has worked closely with the Directorate General of Foreign Trade to promote exports. The country offers a 5 per cent incentive on the export of the majority of telecom equipment. We interact with the Ministry of External Affairs, the Department of Commerce and the Department of Economic Affairs to address the challenges on the export front. The major issues are technical challenges and language barriers. For example, Brazil has strict regulations for certifying telecom products. We are working on this issue to increase exports to the country. Currently, we export to developing countries in Africa and the European Union. In 2013, we are focusing on increasing our presence in the ASEAN region and the CIS.
