It takes guts to question protectionism, but I guess it’s not that difficult when you are in the Prime Minister’s Office:
The Prime Minister’s Office is worried about the IT and Communication Ministry’s policy of encouraging domestic manufacturing.
The PMO has sent the Ministry a note asking for comments on how the policy aims to link manufacturing requirements to national security.
‘MARKET DISTORTIONS’
“Efforts to link manufacturing with security is questionable. It will lead to distortions in the market. Security objectives can be met through audits, tests and need to be handled separately,” states the note sent by the PMO.
The Communications Ministry has proposed a policy that makes it mandatory for companies, government institutions and telecom players to buy at least 30 per cent of their electronics and hardware requirements from manufacturing facilities in India.
The policy also stipulates that manufacturers must ensure that value addition happens locally.
The PMO’s note assumes significance in the light of the protests by the US Trade Representatives and the European Commission on grounds that the policy goes against WTO agreements.
3 Comments
Abu Saeed Khan
“DoT’s decision for locally-made telecoms gear comes three months after research body C-DoT urged the ministry to bar Chinese vendors Huawei Technologies and ZTE from bidding in the NOFN project. C-DoT is the government-owned development center for telecom technology.” Full report is here.
Rohan Samarajiva
The response:
http://www.thehindubusinessline.com/industry-and-economy/info-tech/security-in-telecom-gear-is-a-real-issue-says-dot/article4667324.ece
Abu Saeed Khan
The Cellular Operators Association of India (COAI) supports the PMO’s concerns.
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