The Telecom Regulatory Authority of India (TRAI) has issued a consultation paper on “Promoting Networking and Telecom Equipment Manufacturing (NATEM) in India”.

The rapidly growing number of data users and the upcoming technologies like 5G, IoT, M2M communications, etc. are likely to fuel the networking and telecom equipment (NATE) market growth, the regulator said, adding it provides opportunities for manufacturers to grow into a potent global player.

It becomes necessary for a country to have an agile manufacturing setup for networking and telecom equipment so that value addition to the economy can be maximized. As envisaged in National Digital Communication Policy (NDCP-2018), if India’s contribution to global value chains is to be maximized by focusing on domestic production, increasing exports and reducing the import burden, then several policy initiatives will required to be taken.

Hence, TRAI issued the consultation paper to take views of stakeholders on existing concerns in NATEM. It intends to further examine measures that should be taken to meet the demand of growing market both within the country and outside. It also intends to solicit views on measures required for transforming the telecommunication manufacturing landscape and establish the country as an export hub.

A review of the manufacturing scenario of NATE shows that the country is not able to fully exploit the upsurge in telecom sector. The sector, on one hand, is able to bring foreign exchange to economy in form of foreign direct investment (FDI), but on other hand, huge amount of foreign exchange is flowing out on account of pay-outs for the imported equipment, inputs, Intellectual Property Rights (IPRs) and profit margins.

The export-import figures showcase the urgent need to establish the self-balancing mechanism by reducing imports and promoting exports to reduce the fiscal deficit arising from the sector, TRAI said in the background paper.