Saturday, September 06, 2014: A proposal from the National Manufacturing Competitiveness Council is being examined by the telecom department which proposes to float a $1 billion or Rs 60,000 million government-fund to promote ‘Made in India’ technologies. This proposal has been drafted aiming to boost local gear manufacturing.
A note from the PMO to the telecom department says that this proposed fund will “infuse equity in start-ups promoted by technocrats and scientists of Indian origin on condition that product development and manufacturing happens in India.” If a proper commitment is made by telecom start-ups that development and manufacturing will happen in India then this fund will bear the costs through equity infusion.
This will help in retaining majority ownership and will also have the final authority for giving clearance to all proposals which are related to a potential transfer of management control. The fund, as per the PMO note, will “maintain over 51 per cent stake to ensure a strong telecom start-up isn’t acquired by an MNC and prevented from reaching its full potential in India.” The National Manufacturing Competitiveness Council has also suggested that the “government commit at least a billion dollars to support the development of disruptive technologies towards telecom equipment manufacturing in India.”
This council was set up almost a decade ago to recommend policies for growth of manufacturing sector in India. Now telecom department’s feedback has been sought by the PMO on this proposed fund. Narendra Modi-led government focuses on the local telecom equipment manufacturing arena for Digital India project. This project aims to connect the entire country electronically and digitally. India’a preferential market access (PMA) policy mandates 30 per cent local sourcing of telecom gear to boost local manufacturing. But this policy applies only to government contracts and doesn’t reach private telecom operators or global telecom vendors.
