Government puts on hold market access policy

NEW DELHI: The government said it has put on hold the implementation of preferential market access (PMA) policy that provided for sourcing of security sensitive electronic equipment from domestic manufacturers.

Minister of State for Commerce and Industry E M Sudarsana Natchiappan in a written reply to the Rajya Sabha said that concerns have been raised in many quarters on different aspects of the policy.

"Department of Electronics and IT has informed that in view of the concerns raised in many quarters on different aspects of the (PMA) policy for providing preference to domestically manufactured electronic goods, particularly policy relating to procurement by private sector for electronic products with security implications, it has been decided that the entire policy required recalibration.

"Accordingly, implementation of existing PMA policy has been kept on hold," he said, adding that "it is too early to assess the impact of this decision on domestic manufacturing sector".

He was replying to a query on reasons behind putting on hold the policy for private players in the telecom industry.

As per the PMA policy, it is mandatory for the government to procure a certain percentage of its requirements from domestic manufacturers.

The Cabinet had in February last year approved the policy keeping in view security issues and threat of cyber espionage.

It was envisaged to push manufacturing capabilities in the country to reduce dependence on imports, especially in the strategic fields like defence and telecom.

PMA policy had seen opposition from various foreign trade associations, including Information Technology Industry (ITI) Council which represents major foreign technology companies like Alcatel Lucent, Cisco, Ericsson and Motorola.