The Cellular Operators Association of India (COAI), the industry body representing GSM operators in the country, has stated that levying 10 per cent duty on telecom products that do not fall under the Information Technology Agreement (ITA 1) of the World Trade Organisation (WTO) pact will increase the capex burden by Rs 10 billion.
They further contend that a majority of telecom equipment deployed in India is not locally manufactured, and this trend may continue in the near future. This comes after the government proposed the move to provide a thrust to the domestic telecom equipment manufacturing industry.
India had signed ITA 1 as a member of WTO in March, 1997. Under this agreement, member countries are required to allow duty-free import of products falling under eight categories covering telecom, computers and semiconductors like mobile phones and electronic chips. According to industry analysts, ITA1 has severely affected the electronics manufacturing industry in India.
Meanwhile, COAI has lauded the government for proposals such as setting up of National Rural Internet and Technology Mission. It has welcomed allocation of Rs 70.60 billion for 100 smart cities, extension of a 10-year tax holiday to power projects that are completed by March 31, 2017, allocation of Rs 10 billion for the solar power and setting up of National Rural Internet and Technology Mission.
