US seeks answers on home sourcing of electronic items

NEW DELHI: The US has questioned India's move to make domestic sourcing of electronic products with security implications compulsory for both public sector procurement and private sector telecom licencees at a World Trade Organisation forum, stepping up pressure on the country to limit its application only on select goods.

In a submission to the committee on trade and related investment measures, the US has asked India to explain the circumstances under which private firms may be required to purchase domestically manufactured electronic products and whether it would apply only in the case of those electronic products which have security implications for the country.

"We will discuss all the issues raised by the US with the departments of IT and telecom and give the relevant answers," a commerce department official told ET.

In February this year, the department of information technology had issued a notification requiring the purchase of domestically manufactured electronic products. The policy applies both to government procurement as well as to procurement of those electronic products which have security implications for the country.

The US asked India to explain the circumstances under which private firms like telecom service providers may be required to purchase domestically manufactured electronic products. It also sought an answer to whether this requirement would apply only in the case of those electronic products which have security implications for the country.

India was further asked to explain the purpose of requiring the purchase of domestically manufactured electronic products, either for government procurement or for procurement by non-governmental entities.

On the issue of who would determine whether an electronic good has a security implication, the US said that it appeared that the decision would be left to different ministries. "If so, please explain how differences in view between ministries on this question will be resolved. If not, please explain which entity in the government will make this determination and what criteria or factors will be examined to arrive at this determination," the submission said.

US commerce secretary John Bryson had also taken up the issue with commerce and industry minister Anand Sharma during his India visit earlier this month stating that the provision would limit business opportunities for foreign companies.