Cabinet may consider easing policy for supply of telecom equipment

NEW DELHI: The Union Cabinet is likely to take up tomorrow a proposal to relax the policy for supply of electronic and telecom equipment that can have security implications, a move which may come as a boost to foreign manufacturers.

The government is expected to modify the Preferential Market Access (PMA) Policy by exempting products that will be procured by private companies.

As per the proposal, the policy should apply only to procurement made by government agencies only.

The defence sector, which was earlier expempted from PMA norms, approved by Cabinet on February 2, 2012, has been proposed to be covered under the new framework.

The Preferential Market Access Policy approved by the cabinet on February 2, 2012 called for providing preference to domestically manufactured electronic products in procurement of those electronic products which have security implications for the country and in government procurement for its own use.

The policy has seen major opposition from US-based groups where the government itself has limited import of technology product from Chinese companies on security grounds including cyber espionage threat.

Following protest by industry body, the Prime Minister's office had put PMA policy for private sector procurement on hold and asked for revising the framework.

The PMO has put the condition that "the revised proposal on PMA in the private sector for security-related products will not have domestic manufacturing requirements, percentage based or otherwise."

The government has proposed to make partial modifications in its PMA policy which mandates preference to domestic manufacturers in procurement of electronic products having security implications for the country, official sources said.

The Ministry of Communications and Information technology has prepared a note suggesting changes in PMA policy for cabinet's approval. The matter may be taken up tomorrow, they said.