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Global technology, business groups ask India to revisit market access rules

The Asian automaker is trying to burnish a reputation for quality and banish the jibes of the past, when its Accent sub-compact was dubbed the "Accident" and its boxy Trajet 7-seater the "Tragic".

Infosys chief executive officer and managing director S. D. Shibulal
Infosys chief executive officer and managing director S. D. Shibulal

Expressing serious concerns over new Preferential Market Access (PMA) rules by India, international trade associations representing several global companies have asked Prime Minister Manmohan Singh to revisit the policy.

In a letter, they said these new rules are "inconsistent" with New Delhi's WTO obligations.

"We urge the Government of India to rescind this PMA entirely and initiate a consultation process with the private sector and other stakeholders to more effectively address India's security and economic concerns," said the letter that was released to the press on Monday.

"If the PMA applies to private entities, this would represent an unprecedented interference in the procurements of commercial entities and would be inconsistent with India's WTO obligations," said the letter to the Prime Minister dated April 4.

"We urge the Government of India to rescind this PMA entirely and initiate a consultation process with the private sector and other stakeholders to more effectively address India's security and economic concerns," said the letter that was released to the press on Monday.

The groups urged the Indian government to reconsider its new preferential market access (PMA) rules that they claimed would tip the scales strongly in favour of domestically manufactured electronic goods for government purchase.

The groups also noted the potential application of these rules to private entities, including "telecom licensee" and "managed service provider," which they said would contravene the WTO.

The letter said, "India has exemplified the benefits of competition and regulatory reform as demonstrated by the tremendous growth in the telecommunications and IT services sector over the past fifteen years.

"We urge India to remain, and push forward, on this path. India's economic growth and ability to continue to be competitive in the global ICT sector depend on it," it added.

Indian industry has demonstrated its capacity to compete on a global scale through its growing participation and influence in global markets, the letter said.

It also said, "India should avoid policies that would unnecessarily restrict competition at home which could also spark reciprocation by other countries that enact similar regulations".

Such a result could negatively affect the ability of Indian ICT companies to export their products and services.

It would be ironic if the rule intended to help Indian industry ultimately hurt its exports abroad, the letter stated.

The Information Technology Industry Council ( ITI), Telecommunications Industry Association ( TIA), US-India Business Council ( USIBC), and 32 other associations from the US, Europe, Japan, Canada, Australia, Hong Kong, and Korea have jointly sent the letter to Singh.

The PMA rules culminate a series of similar Indian policy proposals during the past year that have "proposed discriminatory government procurement policies" as a means to stimulate domestic manufacturing of electronics and telecommunications equipment at the expense of foreign companies, it said.