Telcos urge PM against preferential market access

Roughly a year after foreign telecos -- from across Europe, Australia, Asia and the US -- wrote to Prime Minister Manmohan Singh expressing concern over the draft notification of the preferential market access policy, they have again written to the PM, seeking his intervention.

In a recent letter, the telecom equipment makers and their associations wrote: “We urge the government of India to suspend the October 30 draft DoT notification, clarify that the PMA policy will not be applied to any private sector procurements, and initiate a consultation process with global industry and other stakeholders to more effectively address India’s security and economic concerns.”

A department of telecommunications notification on October 30, 2012 stipulates that telecom operators will have to give preference to made-in-India telecom products due to ‘security issues’.

“The application of the PMA to private companies would represent an unprecedented interference in the procurement of commercial entities and would be inconsistent with India’s World Trade Organisation obligations,”

the letter noted.

The telcos and their associations have suggested that a high-level inter-ministerial group may discuss the negative ramifications of the PMA policy.

According to the letter, the issue was already pointed out by several companies and associations on April 4, 2012.

“We are writing again to register our increased level of concern with the ongoing implementation of the policy and its possible application to the private sector.”

The associations warned that the policy may have a negative impact on the telecom sector in terms of foreign investment. The policy “contradicts India’s goals of promoting foreign direct investment”, they observed.

“The current regulatory uncertainty has already had a deleterious impact on the investment climate in India, alienating many foreign investors,” the letter pointed out.

Meanwhile, the US-India Business Council and 37 other business groups and companies from around the world had also repeatedly asked the Indian government to rescind the PMA policy and avoid “market-distorting policies”.