According to a senior DoT official, "The suggestion is to reduce the counterveiling duty (CVD) from the current level of 16 per cent to 8 per cent, which is the lowest possible slab."

However, according to the cellular operators, CVD - which is applicable only on import of products that are also manufactured locally to protect the interests of the Indian companies - should not be levied on cellular handsets, since they are not manufactured in India. Cellular Operators Association of India (COAI), in its pre-budget submission to the Government, had proposed that the custom duty should be reduced to zero. Failing which, at least the CVD of 16 per cent and a surcharge of 4 per cent should be abolished and the effective duty should be reduced to 5 per cent." But DoT officials say that this might not be the case in the future. "We have to take into account the fact that manufacture of cellular handsets might start in India, so we have reduced it to the minimum possible slab."