Thursday, October 17, 2013: Government has planned to review the preferential market access (PMA) policy, which clearly favours domestic equipment makers, offering some relief to foreign telecom equipment players.
According to a draft Cabinet note, the Ministry of Communications and Information Technology has also proposed that the Government should approve the part of the PMA policy that reserves 30 per cent of Government procurement for domestically manufactured electronic goods, reported Business Standard.
The decision to review the PMA came after US-India Business Council (USIBC) and 37 other associations of foreign telecom firms wrote to the Indian Prime Minister showing concern over the draft notification, asking him to look into the matter.
As per the draft Cabinet note, the Ministry has recommended that the extant policy shall not be applicable to electronic products that have security implications and a “separate framework” would be developed for getting these products. However, other provisions will remain the same and it will also apply to Defense.
The note even mulled over the fact that the PMA in the Government sector was mooted to incentivise domestic manufacturing in the country since India is currenly majorly dependent on large-scale imports to meet the demand of electronic goods. The policy is one of the many initiatives taken by the Government in the past two years to kick-start the electronics manufacturing ecosystem in the country, the report further added.
While J Satyanarayana, secretary, Department of Electronics and Information technology, refused to comment, he said that the Government has stated in the past that the PMA policy will be reviewed.
“We welcome the continuation of the Government procurement policy as we feel that it is important to stimulate the domestic manufacturing activity,” said Chetan Bijesure, director and head-manufacturing division at industry body Federation of Indian Chambers of Commerce and Industry (Ficci) told Business Standard.
