The department of telecommunications
(DoT) has sought the support of the Customs department to strengthen the
mechanism to check import of telecom equipment. Its Claims manipulating of
product codes.
The risks of this are two-fold. First,
products from China with malware can enter the country. And second, the
government loses revenue as the codes are changed to those of products
attracting zero duty. Further, firms which have been selected under the
production-linked incentive schemes also lose out as the finished products
manufactured by them face competition from cheaper imports.
The Customs department has asked DoT to
share a list of codes that are being manipulated so that it can step up its
vigil. Routers, switches and gigabit passive optical network (GPON) OLT
equipment figure among these products.
Simultaneously, DoT may also audit
companies who claim to be manufacturing in India. According to official
sources, the inspections could cover the companies’ manufacturing set-up in the
country, components they are importing, location of factories, spends on
research and development, and employee strength, among other factors.
Telecom products attract up to 20%
customs duty. However, for components being used by firms manufacturing in the
country, the duty rate is zero.
The government has also decided not to
grant telecom companies one-time approval to import certain equipment from
countries like China, after finding that it was being misused. For instance, a
telecom firm had sought permission to import 500 units of a GPON OLT product,
but used the certificate of approval to import over 50,000 units, a government
official said.
Optical line terminal (OLT), also called fibre OLT, acts as an endpoint
hardware device used for transmission of data required to provide fibre home
broadband services. GPON is a network capable of high gigabit speeds.
According to a report by a DoT taskforce, most of the country’s
requirements for telecom products are being met using imports. India’s spending
on telecom products was estimated to be $11 billion in 2022 and is expected to
increase to $16 billion by 2025, according to Rakesh Bhatnagar, director
general of VoICE consortium, who heads the taskforce.