While the duties on finished products has been reduced from 25 per cent to 15 per cent, there has been no simultaneous reduction in the duties on components, which still attract a duty ranging between 15 to 35 per cent." Mr PK Sandell, president Telecom Industry Services Association (TISA) and chairman of Telecom Committee of Assocham added: "Not bringing down the duties in a commensurate way for components will hurt all the manufacturers. It wil be a big blow to a Rs 10,000 crore industry which has been growing at a consistent rate of 20-25 per cent." The industry has been requesting the DoT to restore the original schedule of WTO implementation to 2005 instead of 2003. The industry therefore calls the recent budget proposals a "de-facto implementation of WTO requirements with effect from March 1, 2001." Hence, the industry associations have submitted to the DoT proposals seeking to rectify this anomaly. These propose a reduction on telecom sub-assemblies and modules from the current basic 15 per cent dutyto 5 per cent, and the reduction on components and raw materials from 15 per cent to zero.

Among the items which come under the category of modules, sub-assemblies and are equipment such as parts for carrier current line equipment and transmission. Under the category of components for telecom equipment electronic as well as non electronic items such as inductors, capacitors, antennae, coaxial cables, solder paste, etc. Meanwhile for the manufacturer's of telecom terminals the situation is far better. Mr Rakesh Bharti Mittal, vice chairman and managing director, Bharti Teletech: "On the telecom terminals side there has not been much of an impact. There is an effective duty differential of 15 per cent if one takes the weighted averages." Bharti Teletech manufactures telephone terminals under the Beetel brand. Mr Mittal is happy that the countervailing duty on telephone terminals will now be charged on maximum retail price (MRP) rather than the FOB.