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Threat from cheaper Chinese handsets — DoT backs move to put mobile imports on watch list

Thomas K. Thomas

New Delhi , Jan. 6

THE Department of Telecom has backed the industry demand to include mobile handsets, parts, components and accessories on the Government's `war room' watch list to counter dumping of cheaper products from China. The Government had set up the "war room' to keep a watch on imports of 300 sensitive items, which include dairy and petroleum products, under the Committee of Secretaries in the Commerce Ministry.

Senior DoT officials said that the department was in favour of the industry's demands to keep a strict watch on importers of cellular handset related products. They, however, added that it was up to the Finance Ministry to take a decision.

The Indian Cellular Association (ICA), the apex body representing the mobile handset industry, had made a representation in November 2005 to senior Finance Ministry officials, seeking counter measures against the huge parallel market that has emerged due to cheap imports from China.

"The importers are getting in products in all forms, including refurbished, by paying customs duty but in many cases not paying other taxes. The information with ICA is that the imports from China are entering India at very low values; sometimes the customs assessed invoice price of the finished product is below the cost of its raw material. There is a poor chance of the existing industry surviving what to speak of new units coming up which must withdraw since manufacturing is not viable," said Mr Pankaj Mohindroo, ICA president.

The ICA has also demanded that second-hand cellular mobile handsets be included in the negative list licensing. "This is in line with the government policy of controlling the import of consumer durables under second-hand good condition," ICA said pointing out that recently air-conditioners and diesel gensets were added to the list, which already includes laptops, PCs and photocopiers.

A number of handset manufacturers, including Nokia, LG and Samsung, have already announced plans to set up handset manufacturing plants in the country.

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