There’s been good news and bad news for various sections of the Indian telecoms industry in the country’s recent budget, though many headlines have focused on government plans to increase the basic customs duty on specified telecommunications equipment from 10% to 15%.
Share prices of a variety of operators and suppliers were apparently hit by the news that import duty on printed circuit boards would go up by 5% to boost domestic telecommunications equipment manufacturing, albeit with the exemption of a number of critical minerals that are used in the manufacturing of communication equipment.
Another, possibly more welcome, proposal is slashing import duty on mobile phones, chargers and some components that are used for the manufacturing of handsets. However, it’s the proposal to increase duty on circuit boards that bothers industry advocacy group the Cellular Operators Association of India (COAI), which insists it will push up the cost of providing services, especially given regular network upgrades.
The Digital Infrastructure Providers Association (DIPA) was, inevitably, happier, saying that the decision to increase this duty would boost the Make in India drive.
Better news, perhaps, is the proposed allocation of INR1.28 trillion (about US$15.3 billion) for telecom projects and public sector firms under the telecoms ministry, though a lot of that is going to support state-owned operator BSNL, through equipment upgrades and restructuring but also through administration, including some pension-related costs. There will also be an allocation for payment of the principal amount of MTNL bonds, evidentally a problem for the beleaguered state-owned operator.
As for other budgetary news, the Indian Space Association (ISpA), start-ups and investors welcomed the establishment of a INR10 billion (US%119.5 million) venture capital fund aimed at significantly boosting India’s space economy over the next ten years.
In addition, the budget estimate of 2024-25 for the Ministry of Electronics and Information Technology (MeitY), saw a 52% increase in its allocation, mainly to support incentive schemes for both semiconductors and large-scale electronics manufacturing and IT hardware; these are apparently encouraging some large companies to set up facilities in India. The government also allocated a large sum to efforts to boost the country's artificial intelligence infrastructure.
The Economic Times news service noted that, for the second year in a row, no funds were set aside for the rural digital literacy scheme PMGDISHA (Pradhan Mantri Gramin Digital Saksharta Abhiyan) and for PLI schemes for large scale electronics or IT hardware. Nor were funds allotted for the promotion of digital payments.
