The Indian government is currently discussing bringing the home broadband gear under a new import licensing regime. This would push the companies to manufacture locally instead of importing the gear from outside countries. The move is to boost local production and increase self-reliance while adding fresh jobs for the citizens. While the move has the right intention, it might not necessarily be the best for the sector. Telcos and the government are trying to increase the reach of affordable home broadband services throughout the country. To make the services affordable, the service providers need the equipment at a lower cost.
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But if the home broadband equipment has to be manufactured in India, a country which doesn't yet have a proper understanding of manufacturing such products, the costs will surely go up. It is not just the costs, but also the quality of the products might degrade. This would hurt the mission of the government to bring affordable broadband access to every citizen of the nation. According to an ET report, the government is looking to replicate the move of bringing IT hardware under an import licensing regime with the home broadband gear as well.
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Products such as gigabit passive optical network (GPON) OLT/ONT systems, Wi-Fi access points, wireless radio links and ethernet switches might be included under the import licensing regime. Currently, the Department of Telecommunications (DoT) is examining the proposal for this. If it is approved, then the Directorate General of Foreign Trade (DGGT) will implement an import licensing regime that will make it compulsory for the companies bringing the above-mentioned products into India to seek prior permission from the govt to use them.
This is definitely going to be a great move in the long term as India is trying to become self-reliant. However, in the short term, there will be many supply chain issues and the cost of the products will also go up.
