Chinese companies like ZTE, Huawei and Alcatel Lucent develop cheap telecom equipment and systems which are imported by Telcos in India to save on the expenses. A strict duty has been imposed on import of such equipment by India to protect Indian manufacturers from losing out on the opportunities.
The duty imposed on importing telecom equipment from China can vary from 9.42% to 86.59%. The duty on equipment imported from ZTE will be 48.42%, while the same will be 54.09 for Alcatel. The anti-dumping fine for Huawei would be lower at 37.73%. The duty imposed has been extended upto five years till 25th April, 2021
A statement from the Finance Ministry read, “As far as Huawei China, ZTE Corp (China) and Alcatel-Lucent Shanghai Bell (China) are concerned, there is continued dumping of the subject goods from these companies in the period of investigation.”
What is Anti-Dumping duty and why is it levied?
When any good in India is imported from another country at lower prices, much cheaper than Indian market rates, it is called as dumping. To protect local players, anti-dumping duty has been put into effect, which ensures the companies that import such equipment also pay an extra tax which normalizes the cheap price.
The prices might not be cheap, but to qualify as ‘dumping’ they need to be lower than the normal prices. This ensures the local market is not harmed in any sense due to import of foreign material by a company in India.
The Finance Ministry says, “Anti dumping is a trade remedial measure to counteract the trade distortion caused by dumping and the consequential injury to the domestic industry.”
Is it justified to do so?
If India has to protect itself from foreign cheaper goods, specifically from China, then such duties have to be imposed. Similar trends were seen during the boom of Chinese toys and Chinese products we use in everyday life.
Owing to low demand of domestic products, the local artisans and manufacturers are affected and adversely affects the economy of the country as well in a manner. It is a good way to reduce the imports from foreign countries and focus on ‘Make in India’.
Considering the impact of this duty, Chinese company Huawei is planning to setup a telecom equipment manufacturing plant in India to skip the duty and produce locally at similar rates. This will also boost the ‘Make in India’ campaign and encourage other players to follow.
We hope the Government expands this duty to other products as well, that are being imported in large volumes, hurting the sales of local manufacturers every month.
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