NEW DELHI • India will defer spectrum payments due from telecommunications companies for two years to help an industry ravaged by a years-long price war, mounting debt and a court decision last month demanding US$13 billion (S$17.7 billion) in overdue fees.

The moratorium will be for two years beginning April next year, Finance Minister Nirmala Sitharaman told reporters after a Cabinet meeting in New Delhi on Wednesday. Interest as stipulated in airwave auctions will continue to be paid.

The proposal was recommended by a panel of senior Indian bureaucrats under Prime Minister Narendra Modi to help wireless carriers that the government estimates owe more than US$20 billion in licence fees and spectrum charges.

The relief will be worth as much as 450 billion rupees (S$8.5 billion) and the panel will continue to discuss other measures to help the industry, an official told reporters.

The relief on fees comes after Vodafone Idea posted the worst quarterly loss in India's corporate history earlier this month and Bharti Airtel logged a record deficit for the September quarter.

The two-year moratorium follows requests by both companies for relief after the Supreme Court of India ordered the nation's carriers to pay about US$13 billion combined, mostly licence and spectrum fees.

The ruling was over a years-long dispute about how the fees should be calculated.

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