The government is planning to levy a graded import duty structure on telecom components to discourage imports and bolster the domestic supply chain. The proposal, currently under examination by the Department of Telecommunications (DoT), suggests initiating a 10 per cent customs duty in January 2024 and increasing it to 15 per cent by October 2024. The targeted components include packaging items, antennae, Wi-Fi switches, plastic and metal housing items, wires, cables, USB ports, connectors, power adaptors, and other electrical and mechanical items relevant to the telecom industry.
These potential import duties are being considered under the government’s Phased Manufacturing Programme (PMP), designed to incentivise domestic production and boost value addition. If the proposal is approved, the Directorate General of Foreign Trade (DGFT) will implement an import licensing regime. This regime would require telecom companies to obtain permits and prior government approval for importing network equipment used in fibre-based home broadband networks.
According to industry experts, such a move could reduce India’s dependence on foreign markets, especially China, for imported components and raw materials, positioning the country as a self-reliant alternative for global telecom gear supply chains. However, the telecom industry has expressed reservations about the proposed customs duties, citing that India lacks an immediate local ecosystem for these components, which could lead to supply chain disruptions and increased costs for network deployment.
