Tuesday, November 18, 2014: A powerful trade body in U.S. has tried to lobby the top negotiator in Obama reign, to deter India’s decision of imposing 10 per cent customs duty on specified telecoms gear. The action would hamper the South Asian nation’s World Trade Organisation (WTO) treaty commitments and may also tarnish the country’s ability to put in practice the Digital India project.
A recent confidential letter to the US trade Representative Michael Froman by US-India Business Council (USIBC), as seen by ET, it was mentioned that the country must withdraw the notification to levy 10 per cent tariff on a broad range of telecom equipment. It said that since the telecom equipment fall under the purview of the WTO Information Technology Agreement (ITA), it should receive a duty free treatment under the ITA’s obligations. The 10 per cent duty was imposed under the Arun Jaitley’s 2014 budget proposal.
If this duty will be imposed, it would increase the debt-laden telecom industry’s annual capex outflows to up to 10,000 million. In the letter it was highlighted that the move would affect the India’s telecom industry by weakening the FDI in the sector, and thus would put off the most updated telecom products from entering the country.
However a DoT official noted that, the government has already put in much thought into the matter and even mentioned that the government had excluded electronics/telecom items from the purview of zero import duty commitment under WTO’s ITA pact.
The USIBC letter to Obama’s top trade negotiator was drafted when America based tech giants like Google, Facebook, Microsoft and Hewlett-Packard were trying to get a part of the Digital India project which aims at delivering high speed internet across the country.
