COAI slams government over 10% customs duty proposal

Industry body Cellular Operators Authority of India (COAI) has criticised the government for the proposal (under the Union budget 2014-15) to impose 10% duty on telecom products not covered under Information Technology Agreement (ITA). According to the COAI, the move will lead to added capex burden of Rs. 1,000 crore.

Addressing the media, COAI's newly elected Chairman Marten Pieters said: “While the government has stated it will boost local manufacturing, we feel it is a negative approach to the issue. To boost local manufacturing, it is essential to develop the required infrastructure. To develop eco-system and produce world-class equipment, we do not compromise with quality of services.”

“...Many of the items, which are critical for the networks, are not manufactured in India and are not
expected to be manufactured shortly. The policy directive could be detrimental to the network, performance of the industry, eventually hampering services offered to the customer,” he added.

Highlighting the massive growth of mobile broadband in India, especially the latest 3G wave, COAI's new Chairman Marten Pieters called for more allocation of spectrum to make telcos' services more effective.

“Telcos in India have started to shift their focus on data along with value added services. However, since the implementation of data technology depends on multiple factors like availability of spectrum and pricing of smartphones, it is important that additional 3G spectrum is made available to service all markets effectively,” he added.

“While the Industry is witnessing low profit margins, primarily due to high debt paid to finance 3G & BWA Auction held couple of years ago, the sector also underwent a series of unprecedented events and policy reversals. After years of uncertainty and policy paralysis, we are expecting a definitive roadmap for the telecom sector from the new government in the Centre.”