In Short:
Finance minister Nirmala Sitharaman proposed raising the basic customs duty on printed circuit board assembly (PCBA) for specified telecom equipment from 10% to 15% in the Union Budget 2024-25. This move aims to boost domestic manufacturing, make mobile phones more affordable, and increase digital penetration. Industry bodies like COAI have advocated for reducing customs duty to zero on certain telecom equipment to facilitate the deployment of 5G services in India.
Government Proposes Increase in Basic Customs Duty on Telecom Equipment
Union Finance Minister Nirmala Sitharaman has announced a proposal to raise the basic customs duty (BCD) on printed circuit board assembly (PCBA) for specified telecom equipment from 10% to 15%. The aim is to promote domestic manufacturing in the industry.
In her presentation of the Union Budget 2024-25 in Parliament, Sitharaman stated, “To incentivize domestic manufacturing, I propose to increase the BCD from 10% to 15% on PCBA of specified telecom equipment.”
Industry Responses
Nittin Arora, Partner at Grant Thornton Bharat, noted that the government’s move to increase BCD on PCBA for telecom equipment while reducing BCD on mobile devices is a positive step towards achieving the goals of ‘AtmaNirbhar Bharat’ (self-reliant India).
SP Kochhar, Director-General of the Cellular Operators Association of India (COAI), expressed concerns over the impact of high customs duties on the telecom sector. Kochhar urged the government to consider exemptions for certain telecom equipment to ease the financial burden on companies and support the deployment of critical infrastructure for 5G services.
