India: National Digital Communications Policy 2018

Last Updated: 8 October 2018
Article by RV Anuradha and Trishna Menon

By RV Anuradha and Trishna Menon*

The approval of the National Digital Communications Policy, 2018 ('NDCP' or 'Policy') by the Cabinet on September 26, 2018, replacing the National Telecom Policy 2012, is a key milestone in the telecom sector. The Cabinet has also approved the renaming of the Telecom Commission as the 'Digital Communications Commission.' The shift in terminology reflects the blurring of regulatory lines between multiple emerging industries: information technology/the Internet, telecommunications, and television broadcasting.

India in fact had considered a law titled "Convergence Bill" in the early 2000s, which provided a common framework for addressing telecommunications and broadcasting. While the law did not get passed at that time, the NDCP appears to be crystallising the understanding that evolution of technology would require a common regulatory framework.

The NDCP aims to accomplish several strategic objectives, such as creating digital infrastructure for enabling universal access, enhancing the contribution of the digital communications sector to 8% of India's GDP, propelling India to the top 50 nations in the International Telecommunications Union (ITU)'s ICT development index and ensuring digital sovereignty. It then advances three policy 'missions' to achieve the objectives:

  • Connect India focuses on providing universal access to broadband;
  • Propel India focuses on measures targeting increasing investment and ease of doing business and encouraging domestic manufacturing to contribute to Global Value Chains; and
  • Secure India relates to ensuring sovereignty, safety and security of digital communications systems.

Connect India

A key feature of the Connect India mission is to enable the infrastructure convergence of IT, telecom and broadcasting, in pursuit of which, it details measures such as amending the Indian Telegraph Act, 1885 and other relevant acts for the purpose of convergence in coordination with respective ministries, and establishing a unified policy framework and spectrum management regime for broadcast and broadband technologies. Convergence will also require appropriate restructuring of legal, licensing and regulatory frameworks.

The NDCP seeks to establish a National Digital Grid which will be regulated by a National Fibre Authority. It also envisages the need to grant telecom optic fibre cables the status of 'public utility', as well as leveraging existing assets of the broadcasting and power sectors to improve connectivity, affordability and sustainability.

The Policy also aims to facilitate the establishment of mobile tower infrastructure by extending incentives and exemptions for the construction of telecom towers and according accelerated Rights of Way permissions for telecom towers in government premises. The framework governing this are the Indian Telegraph Right of Way Rules, 2016, notified in November 2016, which had initially excluded from its purview tower and infrastructure providers. The Department of Telecommunications (DoT) subsequently clarified that 'licensee' under clause 2 (d) of the Rules, includes infrastructure provider category I (IP-I) authorised to establish and maintain dark fibre, right of way, duct space and towers and give them out on lease, rent or sale basis to telecom service providers on mutually agreed terms and basis. The NDCP crystallises and clarifies this approach.

Another area of focus is to encourage investment in broadband infrastructure through fiscal incentives, including accelerated depreciation and tax incentives and incentivizing fixed line broadband. Implementation of these measures will entail legislative and/or executive actions.

The Policy also aims to review the legislative framework surrounding satellite communications ('satcom') technologies and optimising such technologies. This will entail a revision of the licensing and regulatory conditions that limit the use of satellite communications, such as speed barriers, band allocation, and so on, and streamlining administrative processes for clearances and permissions related to satcom systems and promoting local manufacturing and development of satcom systems.

Propel India

Propel India focuses on attracting investment to the Indian telecom sector, increasing the share of telecom in India's GDP and crucially, promoting local manufacturing of telecom equipment, which will contribute to India's contribution to global value chains.

The Policy states that telecom infrastructure is to be accorded the status of "Critical and Essential Infrastructure." It states that this recognition of communication systems and services as essential connectivity infrastructure at par with other connectivity infrastructure like roadways, railways, waterways, airlines etc. would enable low cost financing for the development of communication infrastructure. To achieve this however, the Reserve Bank of India would need to specifically recognize communications infrastructure as being eligible for lending as a 'priority sector'.

One important aspect of the Propel India mission is the emphasis on initiatives to improve the ease of doing business through reforms of the regulatory and licensing regime and simplification of the compliance obligations.

The NDCP also lays down several objectives on the promotion of local manufacturing and maximising India's contribution to global value chains, by focusing on domestic production, increasing exports and reducing the import burden. It outlines initiatives such as rationalising taxes, levies and differential duties to incentivise local manufacturing of equipment, networks and devices to the extent of domestic value addition, and attracting and incentivizing Global OEMs and Generic Component players to setup manufacturing bases in India. Careful implementation of such initiatives is required in order to ensure that incentivisation of domestic manufacturing is not implemented in a manner that excludes exports- a principle which the 'national treatment' obligations in India's trade and investment agreements, abhor.

Secure India

The Secure India mission aims to establish a comprehensive data protection regime for digital communications that safeguards the privacy and choice of individuals and to ensure that net neutrality principles are upheld. It also highlights the need for the formulation of a policy on encryption and data retention, by harmonising the legal and regulatory regime in India pertaining to cryptography with global standards. India is currently considering a Personal Data Protection Bill (PDP Bill) which provides the basic elements of data protection, which will need to be carefully fine-tuned to achieve the NDCP's objectives of growth of Indian industry, and ensuring security of data. A brief critique of the PDP Bill has been explained here.

The recommendations of the TRAI regarding net neutrality have already been approved by the Cabinet. Careful implementation of its principles, while ensuring quality infrastructure is what is crucial, as has been briefly discussed by us in another paper.


The NDCP is an important milestone for India. Implementing it will require careful review and amendments to relevant laws and policies in India, and creation of appropriate institutional and regulatory frameworks.

Anuradha is a Partner, and Trishna is an Associate at Clarus Law Associates, New Delhi.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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