The Department of Telecom (DoT) has issued draft norms with a revised list of 36 telecom equipment that will get preference in public procurement if they include 50-65 per cent locally made components for manufacturing them indigenously.
Under the draft notification, the DoT has added satellite phones and other satellite communication gears in the list of products that will get preference in public procurement based on the level of local value addition. The list has excluded 5G telecom equipment from the list.
"The government had issued the Public Procurement (Preference to Make in India), Order 2017 (PPP-MII Order) vide the erstwhile Department of Industrial Policy and Promotion (DIPP) Order... to encourage 'Make in India'. Accordingly, the Department of Telecommunications, in suppression of its previous notifications... dated August 29, 2018 and August 31, hereby issues this notification," the draft notification dated September 12 said.
The proposed rules will also be applicable on purchases by states and local bodies in projects funded by the Centre.
The DoT had issued a similar list in August 2018 but the same could not find enough traction among public departments specially after DIPP amended the rules to segregate suppliers based on the level of value addition in their products.
DIPP has classified class 1 suppliers as those having more than 50 per cent local components in their product and class 2 suppliers as those with local value addition in the range of 20-50 per cent.
According to the proposed norm, class 1 telecom gear will be required to include 50-65 per cent locally made components.
All players making telecom gears under production-linked incentive (PLI) scheme will fall in the class 2 category and the list of gears eligible for preference in public procurement will be notified from time to time on the DoT portal.
GX Group, a PLI qualified telecom gear maker, said the minimum content requirements for public procurement of telecom products will go a long way in boosting domestic manufacturing achieving the target of 'Aatmanirbhar Bharat'.
"Not just contributing to economic growth, it would also help in addressing concerns of national security via cyber threats. In the long run this move to boost indigenisation would help the country and industry in multiple aspects," GX Group CEO Paritosh Prajapati said.
He said the proposal will enhance global competitiveness of Indian manufacturers and increase demand and export of Indian goods for all listed 36 components, including routers and ethernet switches.
Domestic telecom gear makers' body VoICE said the notification will fill the gap that companies were facing in public procurement in the absence of any reference rule.
VoICE Director General R K Bhatnagar, however, said at least a new beginning has been made and the success will depend on the final order of gazette notification.
"Hopefully that should be better structured," Bhatnagar said.
He said the cover letter of the draft suggests that any comments regarding local capacity, competition of any product is required to be supported by verifiable data covering companies, value of local content, production capacity, etc.
Bhatnagar said local content data is not generally available in the public domain and at the most it is available with the government only.
"It will be almost impossible to get any additional products included or added in the list of 36 items if conditions on verifiable inputs are strictly adhered to. These types of strict requirements are not there even in DPIIT orders," Bhatnagar said.
VoICE has also expressed concern on excluding 5G telecom gears from the proposed list.
"The government is talking of Indian 4G and 5G stack, Rip and Replacement programmes in the US and EU through Indian stacks. How that can happen if we have notification missing new technology solutions on 5G? When there is no chance of domestic procurement, how will Indian stack succeed and how will global vision of Indian solutions succeed?" Bhatnagar added.
He said standards set by DoT's Telecommunications Engineering Centre are not accepted by other public departments, which call for the need to set up national standards for telecom gears that should be followed by all public departments uniformly for public procurement.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
