Silicon Valley Lobby Group To Hit Out Against India’s Protectionist Electronics Policy

Indian Prime Minister Manmohan Singh
Indian Prime Minister Manmohan Singh

An American Information Technology group which lobbies for large Silicon Valley based companies like Apple and Google is gearing up to attack India for its preferential market access policy for electronic goods, according to a new report.

The Financial Times reported

Dean Garfield, president of the Information Technology Industry Council, which lobbies for large Silicon Valley groups including Apple, Google, and Hewlett-Packard, will testify that India is pressing ahead with measures that will “undermine, if not outright dismantle” its own progress as a global power in the tech sector.

While the governments intent to improve domestic electronics manufacturing, the damage to foreign companies selling in India is massive. For instance, in a recent development, the government decided to keep away foreign companies from participating in a large telecommunications contract for which it has set aside nearly $4 bn.

In October 2011, India announced its National Policy on Electronics which made provisions to provide Preferential Market Access for domestically manufactured/designed electronic products including mobile devices, SIM cards with enhanced features, etc. with special emphasis on Indian products for which intellectual property rights reside in India citing strategic and security reasons.

Companies like Erricsson, Nokia Siemens Networks, Alcatel- Lucent, Huawei and ZTE stand to lose out on the lucrative National Optical Fiber Network contract.

The Indian government is also trying to strengthen the domestic electronics industry which is largely import driven. The 2013 Union Budget waived off customs duty for plant and machinery to setup semiconductor wafer fab manufacturing facilities in the country.

According to government estimates, India imported $25 billion worth of electronic goods in April- Jan 2013.

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