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Indian telecoms face further cost pressure from import tax hike

Fierce price competition keeps carriers from passing on burden to customers

Higher duties on imported network equipment add to the troubles for India's telecom sector, which has been plunged into a price war by the entry of Reliance Jio Infocomm.
Higher duties on imported network equipment add to the troubles for India's telecom sector, which has been plunged into a price war by the entry of Reliance Jio Infocomm.   © Reuters

MUMBAI -- India's three leading telecom companies face a new hurdle to their huge network expansion plans as the government raises the tax on imported equipment to prop up a falling currency.

Prime Minister Narendra Modi's move last week to hike customs duties on some network gear to 20% from 10% and impose an additional 10% tariff on some imports has come as a shock to an industry that is just emerging from a round of consolidation.

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