The Hindu Business Line : Cellphone importers upbeat over duty cut

THE reduction in customs duty for mobile phones, from 10 per cent to 5 per cent, will go a long way in increasing India's teledensity and making mobile phones affordable to the common man, a statement from Reliance Infocomm said.

"Similarly, the exemption from basic customs duty for infrastructure equipment for basic and mobile telephony as well as reduction in customs duty for the raw material for optic fibre and cable will also help in lowering the total cost of information and communication services in the medium to long term," said the statement.

"This will bring down the price differential between handsets available in the grey market and those on which duty has been paid," said Mr Sanjoy Roy, Managing Director of First Mobile India Pvt Ltd, one of the largest importers of mobile phones in the country, and a wholly owned subsidiary of First Mobile, based in Hong-Kong.

This makes a big difference in a market. The current price differential ranges from 10 per cent to 25 per cent, depending on the handset model, he said.

However, CRIS Infac, the information and research arm of CRISIL, said the impact of the duty changes on the telecom services sector is marginally positive only.

The differential between normal and grey market prices will reduce, thus reducing the share of the grey market.

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