Saturday 19 May 2012

Indigenous Manufacturing of Equipment

The Minister of State for Communications & Information Technology Shri Milind Deora informed Lok Sabha in a written reply yesterday that the Government’s Preferential Market Access (PMA) policy does not per se mandate preference to any electronic product. It only provides an enabling framework and is therefore consistent with India’s WTO commitments. The Government has notified the policy for providing preference to domestically manufactured electronic products in procurement due to security considerations.
Article III of General Agreement on Tariffs and Trade, 1994 , pertaining to, National Treatment puts restriction on World Trade Organisation(WTO) signatory countries on use of any internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions which discriminate between the imported or domestic products so as to afford protection to domestic production. It is subject to exemptions allowed under the WTO on grounds specified therein, say on grounds to protect public morals, to protect human, animal or plant life or health or on grounds of national security etc.
 In addition, specific provisions of the agreements under the WTO, namely Article III:8(a) of General Agreement on Tariffs and Trade, 1994 and Article XIII:1 of General Agreement on Trade in Services, allow exemption from the WTO obligations on application of domestic laws, regulations or requirements governing  procurement by governmental agencies of products purchased for governmental purposes and not with a view to use in the production of goods for commercial use. This provision is factored in by the Government in the policy formulated from time to time.
The draft National Telecom Policy (NTP) 2011 contains under objectives, inter-alia, the following provisions:
            i)     Promote the domestic production of telecommunication equipment to meet 80% Indian telecom sector demand through domestic manufacturing with a value addition of 65% by the year 2020.
ii)   Provide preferential market access for domestically manufactured telecommunication products including mobile devices, SIM cards with enhanced features etc. with special emphasis on Indian products for which IPRs reside in India to address strategic and security concerns of the Government, consistent with international commitments.”
                Further, the draft NTP 2011 contains under strategies, inter-alia, following  provisions:
  To incentivise telecom service providers to use indigenous products by encouraging:
i)       Commitment to purchase indigenous products that are comparable in price and performance to imported products.
ii)      Commitment to participate in trials of newly created Indian products, nurture them and place pilot orders.
iii)       Funding R&D and support Indian IPR creation and participate in creation of standards.”
Inputs have been received from various stakeholders on draft NTP 2011 including service providers. The final decision regarding NTP has not yet been taken.

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