After an exhaustive process of consultations, TRAI finalised its recommendations on need and measures to support Indian Telecom Manufacturers. Highlights:
- TRAI recommended preferential market access in public procurement from Indian Manufactured Products and Indian products (Indian IP). For the year 2012-13 preferred access is targeted at 45% ( 30% for Indian manufactured products with min value addition of 25% and 10% for Indian Products) and this is binding on public sector units, MTNL, BSNL etc but also on Government Licensees. Well all service providers are licensees- will private players accept the recommendation? If service providers do not meet the stipulated minimum, they need to deposit amount equal to 5% of short fall with either Telecom Research Fund or Telecom Manufacturing Fund. And if they exceed the minimum, they get refund from license fee in proportionate manner- if they exceed 20% i.e they procure 50% from India, then they get rebate of 20% on license fee for that year.
- All equipment manufacturers (less than 1000 crore turnover ) should get interest subsidy of 3% for Indian Manufactured product and 6% for Indian product. Another incentive is to defer taxes (excise/ sales tax etc) for a period of 5 years with nominal rate of interest and income tax holiday for 10 years.
- TEC to be made an autonomous organization of international reputation for product testing and certification. Once certified , the tender condition of `provenness' to be waived off for 10% of tendered requirement.
- Telecom clusters to be identified and developed. Manufacturing units in the cluster to be provided subsidy at 4.5%
- Telecom Research Park to be set up with 1000 acres of land and 5000 crores of investment, 1000 incubating start-ups, by 2013. The work should begin by May 2011.
- Telecom Research and Development fund with a corpus of 10,000 crores. At 8%, the corpus would make available Rs 800 crores to support about 40 innovations every year.
- Government to provide 3000 crores to Telecom Manufacturing Fund and rest from other bodies.