Unlike Nasscom, the infotech industry’s high profile and aggressive
representative apex association, the Telecommunications Equipment Manufacturers
Association of India or TEMA for short, is a quiet organization. In existence
for more than a decade now, TEMA has rarely made any loud proclamation of its
achievements as the Indian telecom industry’s oldest association. As such,
despite the fact that it has brought a lot of cheer to the telecom manufacturers
in the past couple of years, very little is known of the association outside the
telecom equipment manufacturing community. Apart from its quiet ways, TEMA has
also the distinction of being the only association in the telecom industry that
is not fighting a case against the government. The other two influential telecom
industry bodies, COAI and ABTO, have not just been battling each other but also
the government over issues like the legality of CDMA-based limited mobility
services.
A Broad-based Organization
Affiliated to leading international telecom industry and trade associations,
including ITU, PTC, TIA (USA); GAIA (Spain); ATIA (Australia); CIAJ (Japan),
TEEMA (Taiwan); CCP (Korea); ITAH (Hong Kong), TEMA plays an active role in
dissemination and exchange of information with the government, foreign
organizations, embassies, trade missions and Indian missions abroad. It has a
membership of over 100 companies covering almost 80 percent of Indian telecom
equipment manufacturers. The association is also part of a number of working
groups/committees set up by Government of India like the Telecom Development
Council of the Ministry of Communication and the Working Group of Telecom
Sector/IT Hardware Sector for the Tenth Five Year Plan set up by the Planning
Commission.
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Established in 1990, most of TEMA’s efforts in all these years have not
just been directed at convincing the government to do away with red tapes
affecting the manufacturers, it has also played a crucial role in defining the
broad parameters of the government’s telecom policy from time to time.
Officially recognized by the government of India as the apex body representing
telecom equipment manufacturers, both in the public and private sector, TEMA
plays a crucial role in advising the government and influencing decisions
relating to Indian telecom industry.
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Voice of Industry
No doubt, it has succeeded in grabbing a number of concessions from the
government not only for the benefit of Indian telecom equipment manufacturers
but also for the new private operators, especially in the past two years. For
example, earlier sales tax concession on purchase of telecom equipment was only
the privilege of BSNL (erstwhile Department of Telecom Services) and MTNL as the
Department of Telecom (DOT) alone could issue the C Form for availing sales tax
concessions. It was because of TEMA’s effort that the privilege was extended
to the private operators which in turn now saves them anywhere between Rs 1,000—1,500
crore annually.
Perhaps the biggest battle that TEMA has won for the telecom equipment
manufacturers is its success with almost removing the duty anomaly that exists
between the import of finished products and components. The association had been
fighting for this for the past five years. And its efforts bore fruits this year
when the government in its latest export-import (Exim) policy allowed Electronic
Hardware Technology Park (EHTP) units to sell some amount of their products in
the domestic market as an incentive. It is to be noted here that EHTP units are
allowed to import components duty-free unlike others who have to pay a duty,
which in many cases is higher than the duty on finished products. "We
believe that any export strategy would only be successful if we have good access
to the domestic market. The WTO commitment is with respect to finished goods and
does not cover components, and this has led to the anomaly between duty on
finished goods (which was lower or getting lower) and components (which was
higher). We got this anomaly corrected to a certain extent by getting changes
made in the EHTP scheme," NK Goyal, president, TEMA, says. Goyal, who is
also popular for his skills and knowledge as a Yoga and Reiki teacher, has been
successfully spearheading TEMA’s efforts on many fronts. In fact, he along
with P Balaji, the IIT-IIM Ahmedabad educated secretary-general of TEMA, has
been the key force behind the growing strength of the organization.
Influencing Policy Makers
TEMA has also succeeded in convincing the government to push the date of WTO-induced
tariff-free regime from 2003 to 2005. "We worked hard to convince the
government on this front because we felt that local manufacturers needed some
more time to put their acts together," says Balaji.
Production of Telecom Equipment |
Break-up of Production (2000-2001) |
||
Year | In Rs crore (approx.) |
Year | In Rs crore (approx.) |
1996—97 | 8,300 | Switching | 2,500 |
1997—98 | 9,960 | Transmission | 2,500 |
1998—99 | 10,000 | CPE | 500 |
1999—00 | 10,800 | PIJF | 3,500 |
2000—01 | 11,000 | OFC | 500 |
2001—02 | 15,000 | Others (access, towers, power plants, etc) |
1,500 |
2002—03 | 15,400 | ||
One of the biggest achievements of TEMA has been the liberalization of the
customs inspection regime. TEMA has long been demanding that to enable
high-velocity manufacturing, the government should make policy changes in
customs to introduce procedural controls in place of physical controls to reduce
customs clearance duration to one day. It should enforce audit to ensure
compliance and target a 15-day turnaround from ship-in of components to ship-out
of products. "We wanted the government to trust the manufacturers and allow
the customs regime to work on faith very much like the excise system where the
self-assessment scheme was introduced some years ago and has been working fine.
Thanks to our effort, a self-assessment scheme for customs was introduced in
this year’s budget," says Goyal. Goyal and Balaji point out that the new
liberalized customs inspection regime would go a long way in reducing the cycle
time leading to efficient use of working capital, faster delivery of products
and ultimately better competitiveness of Indian manufacturers.
More recently, TEMA was successful in resolving the dead locked issues
between telecom equipment manufacturers and the state-owned operators BSNL and
MTNL on material procurement issue. As per the new norms, arrived at after
two-month long deliberations among TEMA, DoT and BSNL-MTNL, the tender
processing time has been reduced from 180 days to 120 days. Accordingly, the bid
validity period has been reduced from 210 to 150 days. Among other things,
guidelines have been issued to SSAs to make the initial payment to various
vendors within three weeks of receipt of invoices/bills for the supply of
material.
TEMA has also been busy persuading the government to implement the provisions
with regard to manufacturing contained in the New Telecom Policy 99. The
association wants the government to implement provisions with regard to
incentives to private operators for buying indigenous telecom equipment. It also
wants the government to encourage R&D efforts in the telecom
equipment-manufacturing sector so that Indian companies become globally
competitive and keep pace with the latest developments in the world.