A Congressional committee, which in the recent past had been highly critical of India’s policies on trade-related issues, has welcomed the country’s decision to put on hold the Preferential Market Access, which they alleged was protectionist in nature.

“I appreciate the Indian Government has decided to take a look at these trade polices, particularly after the Commerce, Manufacturing and Trade subcommittee of the House Energy and Commerce Committee held a hearing exposing these unfair practices,” Congressman Lee Terry, who is chairman of the subcommittee, had said yesterday.

“The Indian economy has grown and benefited in the past two decades because it opened its markets and embraced free trade. I am pleased India’s leaders are recognising that both countries would be hurt by extending these unfair trade barriers,” Terry said.

The subcommittee, in a statement, said that the Indian Government has announced plans to revisit and review its “protectionist” Preferential Market Access (PMA) policy.

“As highlighted by witnesses at the hearing, this unfair trade policy threatens US trade relations with India and discourages the manufacture and export of US goods by prohibiting the sale of products made in America,” it said.

PMA policy

India’s PMA policy for information and communications technology imposes local content requirements of up to 100 per cent on procurements of electronic goods by the Government, the statement said.

India planned to extend this PMA policy to private sector entities as well, thus further jeopardising the ability for the US and foreign companies to compete in India.

In response to these concerns, the Indian Government announced this week that it would suspend and further review this policy as it relates to the private sector, it said.

The Telecommunications Industry Association (TIA), the leading trade association of global manufacturers, vendors, and suppliers of information and communications technology (ICT), also applauded the July 8 announcement by the Prime Minister’s Office of India (PMO) to suspend the implementation of the Policy for Providing Preference to Domestically Manufactured Electronic Goods (PMA policy) pending further review and revision.

“This announcement sends a strong message that Government of India (GoI) seeks to create a business environment in India that will continue to attract investment and promote trade in the information and communications technology (ICT) sector,” it said.

“In particular, TIA is encouraged by the GoI’s commitment to avoid imposing domestic manufacturing requirements for private sector transactions involving security-related products.

“TIA, along with other associations representing the ICT industry, has urged the GoI to disentangle its economic and security polices, and believes that the new approach proposed the PMO is a step in the right direction,” it said.

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