The government on July 5 has put on hold the Preferential Market Access (PMA) policy for sourcing sensitive telecom and electronic equipment from domestic manufacturers ,due to security concerns, according to PTI.
This decision was taken at a meeting in the Prime Minister’s office, attended by national security advisor Shivshankar Menon, principal secretary to the Prime Minister Pulok Chaterji, telecom secretary MF Farooqui and top bureaucrats of different ministries. The PMA policy makes it mandatory for the government to procure a certain percentage of its requirements from domestic manufacturers.
“A moratorium on implementation of the policy has now been imposed till adequate assessment of manufacturing capability for products that qualify for domestic value addition is made,” says the PTI report.
In February 2012, this policy was approved by the Cabinet keeping in view security issues and threat of cyber security. It was decided to boost manufacturing capabilities in India and reduce dependence on imports, especially in the strategic fields like defence and telecom.
Earlier, PMO had suggested that DeitY should delink issues of “security” and “local manufacturing” mentioned in the preferential market access (PMA) policy guidelines, issued by DeitY.
PMO had said that in the name of encouraging indigenous manufacturing, Indian markets should not suffer from lack of new and better products from outside India. Instead, it suggested to ensure audits, certification and setting up standards to handle “security issues”. This can be done by interacting with the industry and taking suggestions on ways to address the security issues.
In a note to the Department of Telecommunications (DoT) and DeitY, PMO suggested a “moratorium on implementation of the policy till adequate assessment of manufacturing capability for products that qualify for domestic value addition was made.”
Changes PMO had suggested
- Delink security issues and manufacturing location.
- Audits, certification, setting up standards and a dialogue with the industry to address security concerns
- Freeze on policy roll out till assessment of manufacturing capability for products that qualify for domestic value addition
- Incentivise capability building for products not made in India
