India Justifies Its Preferential Market Access (PMA) Policy For Domestic Telecom Equipments Manufacturers

India Justifies Its Preferential Market Access (PMA) Policy For Domestic Telecom Equipments ManufacturersIndia is a signatory to many treaties of World Trade Organisation (WTO). The obligation arising out of these treaties require that a country would not make any discrimination between the products of local manufacturers and foreign companies. Similarly, the treaties also impose an obligation upon the concerned member that they would not restrict the free flow of goods and services of member countries in their respective countries.

Of course there are some well defined exceptions to these rules as well that justify giving preference of domestic product or one product over another. In that situation the norms set by WTO would not be deemed to be violated.

Of late, Huawei and ZTE are in telecom security tangle of India and other nations like United States. India even made telecom security a part and parcel of its national telecom policy of India 2012. Now Huawei is trying to inculcate trust among US government over telecom security issues. Companies like Huawei and ZTE are also in constant talks with other nations, including India, in this regard.

However, despite the pacification of fears by these telecom giants, governments across the globe have refused to use their products. For instance, countries like US, Australia and Taiwan, etc have shown their security concerns in this regard. Now even India has proposed a new policy that would give preferential market access (PMA) to domestic telecom manufacturers for government contracts.

Naturally, this can be treated as violation of the norms of WTO except where India can prove that this policy is justified due to national security requirements. Indian government has tried to achieve telecom security in India in the past. Some initiatives and proposals have also been suggested by Indian government in this regard from time to time.

For instance, national telecom network security coordination board (NTNSCB) of India has been proposed in the past. The norms for import of telecom equipments in India would also be formulated. A central monitoring system (CMS) for telephone tapping in India would also be made operational very soon. Indian government is also planning a legislation mandating strict cyber security disclosure norms in India. Indian government has also directed that mobile service providers of India shall use Indian made SIM cards.

Clearly India government is showing its seriousness towards ensuring telecom security in India. Now a telecom security directorate of India has been proposed by Indian government. It intends to establish an institutional framework of technical manpower to handle telecom security-related issues linked to the use of telecom gear manufactured by Chinese giants Huawei and ZTE.

India would also cite the examples of US, Australia and Taiwan to prove that it is not violating the norms set by WTO. When other countries are following the same procedure for similar situation, it can be pointers that the stand taken by Indian government is justified keeping in mind the present circumstances.

Foreign companies are maintaining that this would amount to an unprecedented interference in the procurement of telecom equipments from foreign equipment manufacturers and would also be inconsistent with the India’s obligations to the WTO.

However, other nations are also restricting market access to Chinese telecom equipments and India is not alone. The cyber security concerns excluded Huawei from Australian broadband project. Further, the US house intelligence committee is investigating Huawei cyber espionage angle. Media reports have also speculated that ZTE facilitated e-surveillance in Iran. Let us see the development in this regard in India.