By Manoj Kumar
NEW DELHI, July 8 (Reuters) - India will review a policy
that gave preference to locally made electronics goods in
government and private sector procurement, the government said
on Monday after protests by trade groups representing global
companies such as Apple Inc.
Indian Finance Minister P. Chidambaram and Commerce Minister
Anand Sharma will be in Washington this week for meetings with
U.S. Treasury Secretary Jack Lew and Trade Representative
India's federal cabinet last year approved the policy, known
as preferential market access (PMA), citing national security.
Last week, U.S.-based trade group the Information Technology
Industry Council (ITI) said a plan to include private sector
purchases in the policy was inconsistent with World Trade
Organization rules and suggested it was designed to protect
The ITI represents 52 companies, including Apple Inc,
Microsoft Corp, IBM and Intel Corp.
India has also drawn fire from other U.S. business groups
and members of Congress, who say some of the country's policies
put U.S. intellectual property at risk and block U.S. access to
India has excelled in information technology services but
imports the bulk of its electronics requirements.
"Concerns have been raised in many quarters on different
aspects of the PMA Policy, particularly policy relating to
procurement by the private sector for electronic products with
security implications," the Prime Minister's office said in a
The entire policy on providing preference to locally
manufactured goods will be "revisited and reviewed" and
submitted to the cabinet again, the statement said.
India's electronics demand is expected to reach $400 billion
by 2020 and policymakers have said the import bill for the
sector could surpass that of oil due to lack of major local
The prime minister's office said on Monday there were no
international commitments affecting government procurement, but
private sector procurement polices were covered by India's
obligations in the WTO.
The Information Technology Industry Council welcomed India's
decision to put the policy on hold for now.
"We believe the kind of market-based incentives that gave
rise to India's global leaders in software and services should
be the foundation of its effort to build an ICT (information and
communications technology) manufacturing sector," ITI's senior
vice president John Neuffer said in a blog.
"This open approach would help to drive lasting economic
strength," he said.