The Department of Telecommunications (DoT) plans to review value addition targets, or the extent to which network gear vendors need to customise 23 security-sensitive telecom products using Indian resources, in order to bid for government contracts.
The department will examine whether network vendors – both local companies and Indian units of global suppliers are in a position to meet current value addition targets in the absence of a mature local manufacturing ecosystem. DoT?s decision to review local value addition rules for telecom products comes amid concerns raised by leading international trade bodies across the United States, Europe and Japan that the current requirements are unrealistic and tough to meet.
In a communication to the Department of Electronics and IT, various global telecom industry bodies have stated that India?s manufacturing ecosystem is still developing for certain components and sub-components, which limits the ability of companies to meet domestic value addition requirements under the preferential manufacturing access policy (PMA).
At present, network gear makers must meet 45 per cent and 65 per cent of their local value addition targets by 2017 and 2020 respectively. However, DoT will shortly submit a revised list of domestic value addition requirements for telecom equipment after ?examining feasibility issues? to the newly constituted National Planning and Monitoring Council for Electronic Products.
