The Hindu Business Line : Telecom gear makers want level field with importers

THE Telecom Equipment Manufacturers Association (TEMA) has demanded zero duty on raw materials and capital goods to bring local manufacturing at par with the benefits given for importing telecom equipment.

They have also called for the creation of a Rs 100-crore development fund to enable domestic manufacturers compete effectively with duty-free imports.

In a presentation to the Communication Minister, Mr Dayanidhi Maran, here on Monday, the TEMA also called for the setting up of a telecom finance corporation along with a 10-year tax holiday for new as well as the existing units to promote indigenous industry.

Mr N.K. Goyal, President, TEMA, said: "We are not seeking protection for the domestic manufacturing industry. All we are saying is that we should be given the same benefits that are given for importing equipment so that we are able to compete on a level playing field."

Even if multinational companies wanted to set up a manufacturing unit in India, they preferred importing owing to the lop-sided taxation policy which was making imports a cheaper option when compared to local manufacturing, TEMA said.

``We seek immediate zero duty on inputs, raw materials, capital goods as well as zero excise duty because the duty structure puts domestic manufacturers at a disadvantaged position vis-a-vis import of equipment at zero rates,'' Mr Goyal said.

Currently, India imports telecom equipment worth Rs 25,000 crore while domestic manufacturing is valued at Rs 15,000 crore annually.

The TEMA has also sought deemed export status and to treat manufacturing units at par with the special economic zones (SEZs).

In another recommendation, the TEMA has suggested that operators which purchase indigenously manufactured equipment should be given a one-third rebate on the annual licence fees as was recommended by the working group on telecom sector for the Tenth Plan.