India has raised basic customs duty on several telecom equipment and imposed duties on printed circuit boards used to make these as the country looks to curb non-essential imports to address its current account deficit as also boost ‘Make in India’.
Telecom products including base stations, optical transport equipment, combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS), Optical Transport Network (OTN) products and IP radios will face customs duty of 20% instead of 10% now.
A host of telecom products that enjoyed zero duty would face a customs duty of 10%.
India imported about $21 billion worth of telecom equipment in FY18, up from $16.2 billion in FY17. The duty changes would come into effect from October 12, according to a notification issued by the Central Board of Indirect Taxes and Customs late Thursday.
These measures come close on the heels of increase in import duty on a number of consumer goods including air-conditioners, refrigerators, washing machines, footwear, jewellery, furniture fittings and tableware besides imposition of duty aviation turbine fuel.
New Delhi’s current account deficit deteriorated to 1.9% of GDP in FY18 from 0.6% in the year before and is forecast to rise to around 2.8% in the current year.
The trade deficit expanded to $80.4 billion in the first five months of the current fiscal year from $67.3 billion in the year-ago period. A top executive of a local telecom gear maker welcomed the doubling of import duties on telecom equipment to 20%, saying it “would compel telcos to procure critical network gear locally and reduce the sector’s import dependence at a time when the rupee has hit all time lows.’’