Home and rural broadband rollouts and expansions are likely to get a tad cheaper with the FM Nirmala Sitharaman’s proposal to halve the basic customs duty (BCD) on carrier-grade Ethernet switches to 10% in Budget 2025, telecom industry executives and sector analysts said.

They added that data centre buildout costs for the likes of Reliance Jio, Adani Group, Google and Facebook and Microsoft among others could also see some reduction as carrier-grade Ethernet switches are used in setting up data centres. Such Ethernet switches are used to connect servers in data centres.

“The reduction in customs duty from 20% to 10% for carrier-grade ethernet switches aims to reduce costs for telecom infrastructure development at the enterprise scale, and this will reduce deployment costs for rural and home broadband,” Vinish Bawa, partner and telecom leader at PwC India said.

Analysts, though, said national rural broadband venture, BharatNet, could also be a key beneficiary as its expansion plans in providing last mile connectivity could get cheaper, going forward.

Carrier grade Ethernet switches are, typically, used in providing last mile connectivity for rural and home broadband ventures.

The latest Economic Survey for 2024-25, had noted that India’s telecoms infrastructure is being bolstered via the national rural broadband venture, BharatNet.

“As of December 2024, 6.92 lakh km of Optical Fibre Cable (OFC) has been laid, 2.14 lakh gram panchayats (GPs) are service-ready (including 5,032 via satellite, 12.04 lakh FTTH connections have been installed).

Sitharaman said the proposal to halve the BCD on carrier-grade Ethernet switches is to bring it on par with non-carrier grade Ethernet switches.