Thursday, July 18, 2013: While the telecom ministry has opened up to 100 per cent FDI in the sector, there are presumptions that this will gradually lead to security risks. However, Kapil Sibal, the Telecom Minister said on Tuesday that the real concern is the manufacturing and imports and not the FDI. According to him, 100 per cent FDI will have no reason to invite security risks, but it is the manufacturing side that poses the real concern.
Sibal, who was the Minister of Home Affairs, had shown concerns in allowing 100 per cent FDI in the telecom sector. He added that the ministry is trying to deal with the security issues which come from the imported equipment. The solution would be to set up sub factories for electronic chips here in India and provide a Preferential Market Access policy that supports domestic manufacturers.
The Prime Minister’s office has, however, put hold on any further implementation of the preferential policies for the sensitive telecom and electronic equipment and technology. Sibal’s version states that nothing actually has been changed in the PMA policy but there are only new notifications regarding it with security concerns being raised. The TSDM Association, the domestic body of telecom manufacturers in a letter to the Prime Minister had said that the current telecom sector is really sophisticated and using complicated chips could lead to manipulation of sensitive information and further damage to critical instruments.
The telecom sector in India is currently dominated by the private sector with 80 per cent market share. According to TRAI, the 2009-10 year saw only 12-13 per cent of the local products being used in the industry. However, these too were produced with foreign vendor collaboration. Only 3 per cent of the goods are purely local.
