NEW DELHI – Broadband India Forum has approached the telecom department and the finance ministry in India seeking a reversal of a hike in import duties on components and PCBAs, saying the move will drive up the cost of making telecom products and may offset benefits of the production-linked incentive scheme.

BIF has written to the government urging withdrawal of duties and pushed for continuation of the duty exemption on telecom components.

"Certain exemptions were given under customs notification since 2017 covering various items, but on Feb. 1, some exemptions were withdrawn for customs duty on various components. Due to this, it is estimated the cost of Make-in-India products will go up 5-6% because many of the components are imported; they are not made here," said BIF president TV Ramachandran.

"This is likely to completely offset the possible benefits that could accrue from the excellent PLI scheme announced by the Department of Telecom on Feb. 24, 2021, thereby rendering it ineffective," BIF told the government. "This would seriously impact the government push for Make in India under the Aatmanirbhar Bharat mission and also make telecom products made in India uncompetitive compared to equivalent products imported from FTA countries."

Earlier, in a letter dated Mar. 1, BIF called attention to the budget-related notification, and said the telecom industry would be liable to pay a basic customs duty and social welfare surcharge on inputs or raw materials for manufacturing of telecommunication equipment falling on the list.

"Customs duty payable post the removal of this exemption would lead to many components suffering an additional duty ranging between 8.25% to 16.5%, making the cost of Make-in-India telecom products go up.”

BIF also said imports of PCBAs for telecom manufacturing are "suffering" a duty of 11%.

“While the intent of the government is to promote as much local manufacturing of these unpopulated PCBs, we see that at this point in time, the kind of unpopulated PCBs we require for the telecom products are not available in India.”

The industry body requested the government continue with the duty exemption available for PCBAs, so supply-chain resiliency is enabled.

"This may be withdrawn once the Indian manufacturers develop the required capability and sufficient capacity of unpopulated PCBs," BIF said. "We urgently beseech you to withdraw said duties and request for continuance of the duty exemption on the telecom components as mentioned."

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