Wednesday, July 10, 2013: Government of India said that it will re-evaluate the preferential market access (PMA) policy that favoured locally-manufactured electronics goods in government and private sector procurement. The decision to review the policy came after protests by various trade groups hailing from global companies including Apple Inc. It is worth mentioning here that the federal cabinet approved the policy last year citing national security.
Last week, the Information Technology Industry Council (ITI)- a US-based trade group that represents 52 companies including Apple, Microsoft and Intel, expressed the concern saying a plan to rope in private sector purchases in the policy conflicted with World Trade Organisation policy. ITI urged it was designed to defend local manufacturing.
India is doing extremely well in information technology services but imports a major portion of electronics. Prime Minister’s office said, “Concerns have been raised in many quarters on different aspects of the PMA Policy, particularly policy relating to procurement by the private sector for electronic products with security implications.” It further stated that whole policy that provides preference to locally manufactured goods will be “revisited and reviewed” and presented to the cabinet again.
The demand for electronics goods in India is likely to touch $400 billion by 2020. According to the prime minister’s office, there were no global commitments that influence government procurement, but private sector procurement polices were protected by India’s obligations in the WTO.
