Despite being the fastest growing telecom market in the world, domestic manufacturers account for only 12% of the total equipment required in a network. Now, in a boost to domestic firms, the Telecom Regulatory Authority of India (TRAI) has come out with a policy to boost home production.TRAI has recommended mandating mobile companies to source 80 per cent of equipment from domestic manufacturers, a R3,000-crore Telecom Manufacturing Fund (TMF) and subsidy to offer equity capital for all domestic manufacturers that have sales of less than R1,000 crore.
The regulator has also proposed limiting excise duty and VAT (value-added tax) on indigenously manufactured products to 12% and a deferment of excise, CST (central sales tax), VAT and GST (goods and services tax) for a 5-year period for local companies with sales of less than R1,000 crore.
TRAI has recommended that the operators should be mandated to buy locally
{{/usCountry}}TRAI has recommended that the operators should be mandated to buy locally
{{/usCountry}}manufactured equipment in a phased manner. It says by 2015, telecom operators should procure 45% of all equipment domestically. Of this, Indian firms should have a 25% share.
Production by foreign companies such as Nokia Siemens Networks and Alcatel Lucent in India is considered as domestic manufacture.
Aiming to build intellectual property and patents, the policy also advocates indigenous research and development activities and proposes a telecom research and development park within two years with a fund of R5,000 crore.
The policy also has focus on encouraging semiconductor manufacturing.
TRAI has also recommended two fabrication units in India with government assistance.