"To boost domestic production and reduce our dependence on imports I intend to take following steps. Impose basic customs duty (BCD) of 10 per cent on import of specified telecommunication products that are outside the purview of Information Technology Agreement," Jaitley said in Parliament.
India is signee of Information Technology Agreement 1 as a member of World Trade Organisation. Under ITA 1 agreement, member countries should allow duty free import of products falling under eight categories covering telecom, computers and semiconductors like mobile phones and electronic chips.
He added that the Budget gives a positive signal that while India will meet all its WTO commitments and will also support domestic manufacturing.
The move is expected to encourage production of VoIP phones and some telecom network equipments for which demand is increasing with rapid change in technology.
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The Finance minister proposed to "exempt all inputs/ components used in the manufacture of personal computers from 4 percent special additional duty (SAD)" and "Impose education cess on imported electronic products to provide parity between domestically produced goods and imported goods."
Industry bodies linked to electronics manufacturing hailed measures announced in the Budget.
"While this is a welcome step as it will encourage telecom products manufacturing, it is not clear why SAD has not been removed from all electronic components and ICT products. SAD is a regressive tax and does not serve any purpose. SAD should be removed from all electronic components and ICT equipments," ELCINA President Subhash Goyal said.
"Cathode ray TVs are used by weaker sections who cannot afford to buy more expensive flat panel TVs. I propose to exempt colour picture tubes from basic customs duty to make cathode ray TVs cheaper," Jaitley said.