Wednesday, November 4, 2020

Global telecom gear MNCs urge govt to change norms, seek level field

 

Global equipment manufacturers call for sweeping changes to calculation of value addition norms.



Global telecom equipment vendors have urged the government to make sweeping changes to the method of calculating value addition norms, so that they are eligible for government contracts under the public procurement policy for the Preference to Make in India (PMI) scheme.
The scheme mandates preference for domestic products in public-funded projects. The letter, sent to the DoT a few days ago through the Cellular Operators Association of India (COAI) is critical for two reasons. Without a change in value addition norms, global vendors such as Nokia, Ericsson, and Samsung will not be able to participate in the upcoming RFP for 4G equipment to be bought by BSNL and MTNL.

In case of no change, telecom gear makers will be deterred from further investing in manufacturing and exports from the country, despite the government wanting them to invest more, especially by moving some of the manufacturing from China to India.

In the October 29 letter, the COAI asked for other factors to be included when value addition norms are calculated. For example, telecom gear makers could be given a higher weight for their large R&D investments, as well as for the costs they incur on maintaining and servicing warranties.

It asked for a scientific study on the Indian manufacturing poweress in telecom and networking to ensure a competitive market, where current local manufacturing capacity should be 50 per cent of the Indian market size of the product.

The COAI also demanded that firms be given credit under the public procurement policy (PPP) for the PMI scheme for components they source from India for their factories abroad. Further, manufacturing firms that adopt an export-led model should be considered to be ‘deemed domestic’ and given credits under the revised policy.

 

 

No comments:

Post a Comment