India's telecom equipment imports, which include mobile handsets, grew by over 20 per cent to Rs 74,116 crore last fiscal. These imports have continued to rise from 2011-12, when they totalled Rs 59,447.40 crore, to Rs 61,539.01 crore in 2012-13.
They reached Rs 74,116.21 crore in 2013-14, according to the government data. Between April and October, first 7 months of the 2014-15 fiscal, the imports stood at Rs 52,310.47 crore. Meanwhile, according to Indian Cellular Association, 225 million mobile handsets were imported in 2014, up 20 per cent from 187.5 million in the previous calender year.
In 2011, the number stood at 130 million. While the overall demand has grown from 180 million units in 2011 to 270 million in 2014, the volume of devices made in India declined from 155 million in 2011 to 58 million in 2014. The government has been taking steps to promote domestic manufacturing and R&D of telecom equipment.
These include 100 per cent FDI allowance in manufacturing of telecom products under the automatic route, imposition of basic custom duty of 10 per cent on specified telecom products outside the ITA and education cess on imported electronic goods.
Also, the government has reduced the basic customs duty on HDPE, used in the manufacturing of optical fibre cables, has been reduced from 7.5 per cent to nil in the 2015-16 Budget. Besides, all goods, except populated printed circuit boards, for use in manufacture of ITA bound items have been fully exempted from SAD. SAD has also been reduced on imports of certain other input and raw materials.
The Budget also proposes to increase the time limit for taking CENVAT credit on inputs and input services from six months to a year as a measure of business facilitation. The Cabinet has also approved the Electronics Development Fund Policy in December last year. This was done to support funding in areas of electronics system design and manufacturing, nano-electronics and IT, including telecom.