BIF seeks reversal of hike in import duties on components, PCBAs

New Delhi, Apr 19 (PTI): Industry body Broadband India Forum (BIF) has approached the telecom department and the finance ministry seeking reversal of hike in import duties on components and PCBAs effected in recent Budget, saying the move will drive up the cost of making telecom products and may offset benefits of PLI scheme.
The BIF has written to the government urging withdrawal of the said 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 But on February 1, some exemptions were withdrawn for customs duty on various components. Due to this, it is estimated that the cost of Make-in-India products will go up 5-6 per cent because many of the components are imported, they are not made here,” BIF President TV Ramachandran told PTI.
In a recent letter to the Finance Secretary, the BIF has voiced concern that duty increase in components, due to the notification, has resulted in significant increase in the cost of production. “This is likely to completely offset the possible benefits that could accrue from the excellent PLI (production-linked incentive) scheme announced by the Department of Telecom (DoT) on February 24, 2021, thereby rendering it ineffective,” BIF has told the government.
The industry has made two sets on submissions on the issue to the government – on March 22 and previously on March 1.
Drawing attention to the import duty issue, BIF contended, “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 as compared to equivalent products imported from FTA countries”.
Highlighting that significant investments into the sector are hinging upon the takeoff of the PLI policy, BIF urged the government to address the issue.
Earlier in its letter dated March 1, BIF had called attention to the Budget-related notification, and rued that the telecom industry will be liable to pay basic customs duty (BCD) and Social Welfare Surcharge (SWS) on inputs or raw materials for manufacturing of telecommunication equipment falling in the said list.
“Customs duty payable post the removal of this exemption, would lead to many components suffering an additional duty ranging between 8.25 per cent to 16.5 per cent making cost of Make-in-India telecom products to go up…,” BIF had said then.
This duty increase coming on top of the removal of export incentive (MEIS) is impacting the cost competitiveness of Make in India products.
Despite the government push for Make-in-India under the Aatmanirbhar Bharat mission, telecom products made in India will, as a result of the recent move, become costlier than the finished products imported from FTA countries, the BIF claimed.
It added that import of Printed Circuit Board Assembly (PCBA) for telecom manufacturing is also now “suffering” a duty of 11 per cent. PCBA is used across telecom products such as phone, base stations, controllers and others products.