TRAI Restarts Consultation to Boost Local Telecom Equipment Industry

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India’s highest telecom regulating authority, Trai has restarted the consultation process to boost manufacturing of local telecom gears. Previously in year 2010, they started the consultation for the same. “The present consultation paper has therefore been aimed to realistically assess India’s true potential in equipment manufacturing with the aim to arrive at recommendations that would enable Indian telecom industry to transition from an import-dependent industry to a global hub for manufacturing,” said Trai.

In the last few years, Telecom industry has seen tremendous growth. With increasing number of mobile users per year and internet penetration into the deep pockets of India, future of telecom looks very promising. But today, India relies heavily on foreign equipment’s in order to perform its telecom operations.

Since 2012, India’s import bill has been increasing at a rate of 16.3% annually, while the exports have been declining by 17.98% each year. According to government sources, India has imported telecom equipment’s worth over Rs 55,000 crore in 2012-13 while exports were around only Rs 20,000 crore. But in year 2015-16, imports were over Rs 1 lakh crore and exports had reduced to just over Rs 10,000 crore. India imports 90% of its telecom equipment’s despite government incentives for boosting local manufacturing units.

“Even as the mobile handset manufacturing industry has shown good progress in the last five years, same cannot be said for telecom equipment manufacturing,” Trai said.

While service sector contributes to near about 60% to India’s GDP, contribution of manufacturing industry to India’s GDP is only 16% (and it has been stagnating at around 16 per cent on average since 1990).

Each month 1 million new people enter into the job market. India needs to create millions of jobs each year for its aspirational youths. Manufacturing has the potential to create huge employment opportunities and meet such demands. Government and Trai therefore want to focus more on boosting manufacturing in India.

There is one another aspect of “Security” apart from “Economy”. Trai does not want to be excessively dependent upon foreign goods, as it might make security vulnerable.

Trai sought some suggestions from different stakeholders on varied dimensions, be it innovation, productivity, efficiency or FDI for boosting local manufacturing. Trai also sought suggestion for policy framework, standardization, incentives, certification and testing of telecom equipment.

Last date for providing suggestion is October 16 and counter-comments, if any, October 30, 2017.