The move is set to come as a shot in the arm for the international telecom carrier which is on an upward growth spiral. VSNL will be undertaking capital expenditure to the tune of Rs 1,000 crore in the current fiscal going up to Rs 1,100 crore in 1999-2000.

The telecom carrier has been given the super star trading house recognition following net foreign exchange inflow of a whopping $650 million that it accounted for during 1997-98.

Industry sources pointed out that almost 75 per cent of VSNL's capex would go into purchase of equipment, bulk of which is imported. "The duty on equipment which would now get a zero duty EPCG import licence benefit ranges from about 30 per cent to 54 per cent. Such equipment wouldaccount for about Rs 350 crore worth of the capex and with the duty component waived-off, the saving for the company could be to the extent of Rs 100-150 crore per year by rough estimates," the industry source said.

"This is if capex stays at the current levels of Rs 1,000 crore. The manner in which the company is growing is unlikely that the figure would not go up in the coming years. The other benefit for the company would also be in terms of being able to effect speedy imports which would be vital in an era where changes are going to be fast," the source added.

VSNL's super star trading house will be applicable till March 31, 2001. The status is based on the net foreign exchange earnings for the last three years by a company.

As of now, only seven companies in the country have received this status prominent among which are Hindustan Lever and Indian Oil Corporation.

The various benefits which VSNL would get include eligibility for special import licence to the extent of 15 per cent of the netforeign exchange earned, speedy customs clearance of imported goods and exemption from certain cumbersome procedures. In addition, the company would be eligible for zero duty EPCG import licence which will reduce the overall cost of imported capital goods and equipment by 30 per cent.