US lawmakers oppose India’s market access policy on ICT

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Washington: Expressing concern over India’s recent market access policy, a bipartisan group of 45 American lawmakers have asked the US Trade Representative (USTR) to take action against it as it has the potential for detrimental impact on high-tech US exports to India.

They have written a letter to USTR Ron Kirk urging him to take action against India’s Preferential Market Access policy, which aims at promoting high-tech manufacturing in the country by making it mandatory for government companies to buy certain security related equipment from local firms.

“The potential detrimental impact of this policy on US high-tech exports to India warrant USTR’s consideration to ensure that US technology companies are able to compete fairly in this critical market,” they said.

Led by the Co-Chairs of the Congressional High Tech Caucus, Congressman Michael McCaul and Congresswoman Doris Matsui, the bi-partisan letter argued that PMA policy would essentially halt the export of US made high-tech goods into the Indian market and is a clear violation of the World Trade Organization rules.

“The potential detrimental impact of this policy on US high-tech exports to India warrant USTR’s consideration of all available tools to ensure US technology companies are able to compete fairly in this critical market,” said the letter dated October 2.

It added, “We remain concerned that the PMA is designed to boost domestic manufacturing of information and communications technology (ICT) hardware through discriminatory, local content requirements, and more specifically, is aimed at forcing foreign ICT companies to establish manufacturing in India.

“Furthermore, it seems clear this policy will be applied not only to public procurements but also to procurements by private-sector entities.”

Since the original policy was published earlier this year, the Obama administration has supported the US technology industry by raising concerns at the highest levels of the Indian government, the lawmakers said.

They added that the European and Japanese governments have also raised this issue directly with New Delhi.

“In addition to making clear its opposition to the policy, US industry groups have also developed constructive policy recommendations for the Indian government that do not resort to discriminatory policies or violate global trade rules,” the letter said.

The lawmakers also informed USTR that in a bipartisan letter, 21 members of the US House of Representatives Congressional High-Tech Caucus wrote to the Indian Ambassador to the US Nirupama Rao, on June 11, 2012, raising concerns over the policy and urging the Indian Government to reconsider its implementation.

Despite all of this high-level engagement, the lawmakers said, that last month India issued new guidelines implementing the PMA policy, which states unequivocally: “It shall be mandatory for all organisations, public or private, procuring electronic products notified under this clause to provide preference to domestically manufactured electronic products in terms of the policy”.

The lawmakers said, “We understand that the Indian Government is now in the process of defining the scope of products subject to the new policy.

“How that scope is defined will reveal whether the Government of India’s concern is, as it has stated, security, or whether it is an effort to promote domestic manufacturing through discriminatory, WTO-inconsistent actions.”

The letter added, “Taking robust action against discriminatory policies is crucial not only to supporting American workers, but also to sending a signal that the United States will not allow countries to violate fundamental international trade obligations.

“At this time of economic uncertainty, the American people expect a level playing field in the global marketplace. We urge you to use all tools at your disposal to remedy this situation for the benefit of American workers and exporters.”

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