The European Union (EU) has raised concerns about India?s domestic sourcing norms for the purchase of telecom equipments by the government agencies. Earlier, India had announced its intention of coming out with a policy that favours locally-manufactured electronic and telecom equipments in government purchases. Therefore, EU has raised concerns about these norms with the World Trade Organisation (WTO) and has asked for clarification on how much value addition needs to be done in India for such items to qualify as locally-manufactured.
However, the Indian government maintains that its policy on compulsory sourcing of a minimum 30 per cent of telecom equipments and products by government ministries and departments was in strict compliance with WTO norms. Also, since India is not a participant to the WTO agreement on government procurement, its policies related to purchases made by the government do not fall within the WTO?s regulations.
The Department of Electronics and Information Technology had notified in December 2013 that the individual departments and ministries are free to specify local value addition requirements that a product should satisfy for it to qualify as domestically-manufactured electronic product, but has specified minimum levels of domestic net addition. As per the norms, the domestic addition must range from 25 per cent in the first year of production to 45 per cent in the fifth year of production.
