Manila/Singapore: India will review a policy preference for domestically-manufactured electronic goods after business groups called for it to be withdrawn and companies raised concerns on procurement of security-sensitive products.
The so-called preferential market access (PMA) policy will be recalibrated and presented to the cabinet, according to a statement posted on Prime Minister Manmohan Singh’s website on Monday. The department of electronics and information technology will submit the revised policy within four weeks, it said.
The American Chamber of Commerce in India, Japan Information Technology Service Industry Association and the US-India Business Council were among 35 business groups that asked the government in April to rescind the policy, saying it may violate India’s obligations to the World Trade Organization if applied to private companies.
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, according to the statement. The revised proposal on PMA in the private sector for security related products will not have domestic manufacturing requirements, percentage based or otherwise.
The new proposal will include a detailed provision for project and product sector specific security standards, alternative modes of security certification, and a road map for buildup of domestic testing capacity, the government said in the statement.
A top US information technology advocacy organization welcomed the government’s decision to review the PMA policy and said it is hopeful it would lead to the country adopting global approaches to its procurement policies. “There’s good news from New Delhi today as the government of India has opted to take a closer look at its controversial policy designed to compel foreign companies to manufacture electronic products in India if they want to sell there,” John Neuffer, senior vice-president Global Policy, of the Informational Technology Industry Council (ITIC) said on Monday.
ITIC has American firms like Google, AOL, Microsoft, IBM and Microsoft as its members.
“Isolation ignores innovation, freezes opportunity, and drives a stake through the heart of economic growth. That’s why we welcome the government’s decision to revisit and review the entire policy, including to hold in abeyance the application of its PMA policy to private-sector procurements,” Neuffer said. “We believe the kind of market-based incentives that gave rise to India’s global leaders in software and services should be the foundation of its effort to build an ICT manufacturing sector. This open approach would help to drive lasting economic strength,” he said. BLOOMBERG & PTI