COAI Criticizes Customs Duty Hike Impact on Telecom Sector

The Cellular Operators Association of India (COAI) criticized the government's proposal to increase basic customs duty on printed circuit board assembly for certain telecom equipment to 15%. The increase is expected to raise service costs and hamper telecom networks upgrades. COAI also lamented unaddressed demands like reducing the license fee levy.

Industry body COAI recently criticized the Budget proposal to hike basic customs duty on printed circuit board assembly (PCBA) of certain telecom equipment to 15%, stating it will increase the cost of providing services as telecom companies continuously upgrade their networks.

COAI expressed disappointment over the government's failure to address the industry's long-standing demands, including the reduction of the license fee levy. "The government has also proposed to increase Basic Customs Duty from 10% to 15% on the PCBA of specific telecom equipment. This will raise service costs as telcos are constantly enhancing their networks with new technology," said SP Kochhar, Director General, COAI.

The association reiterated its previous requests for customs duty exemptions on certain telecom equipment to mitigate the cost challenges of deploying such infrastructure. Over the past 5-6 years, customs duty on telecom equipment has gradually increased to 20%, posing a substantial financial burden and significantly affecting the rollout of 5G services in India. COAI suggested reducing the duty to zero and gradually increasing it as a domestic manufacturing ecosystem develops.

(With inputs from agencies.)