The Telecom Regulatory Authority of India?s (TRAI) recommendations on the ?Telecommunications Equipment Manufacturing Policy?, remains a contentious issue.
After the United States Trade Representative?s (USTR) raised certain concerns pertaining to the proposed policy, the Ministry of Commerce has followed suit, say news reports.
The Minister of Commerce has reportedly expressed reservations about the policy?s proposed guideline to give preferential access to Indian telecom equipment manufacturers. As per the proposed policy, 30 per cent of all electronic equipment procurement is to be reserved for goods manufactured in India.
The Ministry is reportedly of the view that this would be against international trade norms.
This is in continuation of the ongoing debate on the policy. Prior to this, USTR had expressed its concerns on the recommendations on grounds that if implemented, the proposed recommendations may severely impact the businesses of American companies operating in India.
USTR?s views were objected to by the Telecom Equipment Manufacturers Association of India (TEMA), who had written to the Department of Telecommunications (DoT) stating that the USTR?s views not only challenge the policy, but also increases the threat to national security.
TRAI?s recommendations present a case for domestic manufacturing in the country, which has been negligible so far. It mandates that telecom firms source 80 per cent of their network equipment and other related infrastructure from domestic manufacturers in a phased manner. This also includes networks produced by the manufacturing units of foreign vendors located in India.
Further, TRAI has urged the government to ensure that companies owned by Indians and located in India get 50 per cent of all telecom network orders by 2020. Currently, locally manufactured telecom hardware accounts for 12-13 per cent of mobile operators? needs. Of this, Indian companies account for a mere 3 per cent.
The body objected to this clause, in particular and said that it wasn?t pragmatic to create the entire supply chain of telecom gear in India, given the globalised nature of the industry.
Further, the body disagreed with the Indian regulator?s stance that commercial telecom networks ought to be sourced via local channels, as it opines that imported telecom gear is adequate to ensure a secure telecom network.
Moreover, it asked for clarity on the regulator?s recommendation that handset players be permitted to include hardware and other components sourced from predefined trusted sources only while manufacturing hand-helds.
The body had also said that the suggestion to install core hardware in the telecom network only after certification in India cannot hold, as global certification standards must also be taken into account.
