As per the Clause 2.2.2 of ‘Policy for Preference to domestically manufactured electronic goods’, all ministries/departments (except) and their agencies will have to buy Desktop PCs and Dot Matrix Printers under the provision.
In a bid to increase domestic production of PCs and printers, the Government of India has approved the Preferential Market Access (PMA) policy, which will give preference to the ‘domestically manufactured’ Desktop PCs and Dot Matrix Printers. According to the policy, the government agencies will prefer domestic PC and printer manufacturers for placing its orders.
There is a good amount of procurement of Desktop PCs and Dot printers happening for government agencies. As per the Clause 2.2.2 of ‘Policy for Preference to domestically manufactured electronic goods’, all ministries/departments (except) and their agencies will have to buy Desktop PCs and Dot Matrix Printers under the provision.
Defining a Desktop PC, the policy said, “For the purpose of this Notification, a Desktop PC shall necessarily consist of a CPU, Memory, hard disk drive, Keyboard, Mouse and a separate or integrated display unit and should be able to operate independently.”
In the case of Desktop PCs, 50 per cent (in value terms) of the total Desktop PC procurement needs to be from the domestic manufacturers or manufacturers who are doing 30 per cent (in one year) value addition in terms of Bill Of Material required for the Desktop PCs.
While, the policy defined a Dot Matrix Printer as, “A Dot Matrix is a type of impact printer that forms dot on paper by a metal pin of diameter 0.2 mm to 0.33 mm, which is driven by electromagnet based on solenoid principle and required character matrix is produced by horizontal and vertical resolution of dot matrix printhead. Dot Matrix Printer can create carbon copies and carbonless copies based on mechanical pressure of pin.”
In the case of Dot Matrix Printers, 50 per cent (in value terms) of the total Dot Matrix Printers procurement needs to be from the domestic manufacturers or manufacturers who are doing 40 per cent (in one year) value addition in terms of Bill Of Material required for the Desktop PCs.
One direct advantage of it is that manufacturing will increase in India. A highly-placed source in the Department of Electronics and Information Technology (DietY) said, “The OEMs who want to participate in Indian government projects will now be forced to set up manufacturing in India. This will not only increase electronics manufacturing in India but also improve job prospects for engineers. This policy will also give boost to domestic manufacturers, who were by far not-so-preferred, because of the excess of international players.”
Yet another challenge that the OEMs may face is in the value addition aspect. The value addition has to happen in different components and the manufacturers will also have to justify that the value addition is done as per the clauses of the notification. Commenting on the policy, Manish Sharma, managing director, Panasonic India Pvt Ltd, said, “This is a positive decision for the growth of Indian electronics industry. Currently, it will not impact much of our business because we are importing our products from the overseas factory. Having said that, we cannot deny the fact that government sector is definitely a major area for any of the OEMs. Going forward, we will analyse the opportunity so that we also make ourselves competitive for the new guidelines. As of now it will not have a great impact on us as government is not a big business out of our current portfolio. It is more about office automation and retail sales for our printers at this point in time. I believe that the scope in government sector will expand particularly in the IT products. We will re-asses the situation going forward and if required, we would do the needful to participate in the opportunity.”
A similar initiative was taken for the telecom equipment last month where the Union government had approved the Preferential Market Access (PMA) policy to support the domestic manufacturers and had made its intent clear to give preference to domestically manufactured telecom and electronic products. As reported earlier, DietY had then clarified that the products procured by the ministries and departments have to be utilised by the ministries, departments and agencies themselves for government funded telecom projects and cannot be resold commercially. The policy will be in force for a period of 10 years.
DietY will also notify from time to time the formula for calculation of value addition for telecom products. “All telecom products, which do not meet the minimum value addition criterion for that year shall be treated as imported telecom products and dealt accordingly,” says a government notification released on 5 October, 2012, declaring the products and value addition norms to be followed by domestic manufacturers of telecom products. This notification is sequel to an earlier government notification dated February 10, 2012, wherein the preference to domestically manufactured electronic products was announced. “Preferential market access is one of the key policy initiatives of the government and a step in the right direction,” says J Satyanarayana, secretary, DietY.
