Niti Aayog CEO Amitabh Kant, in a straight talk with leading and potential global telecom equipment-makers such as Ericsson and Nokia, made it clear today that Free Trade Agreements (FTAs) with ASEAN countries are here to stay. Indian companies, he said, should not promote protectionism but build scale and size to compete with the world.
Kant was responding to the demand by telecom equipment-makers that the government should rectify the “anomaly” that has occurred due to India’s FTAs with Southeast Asian countries that allow them to export telecom components to India duty-free, thus obviating the need for them to set up plants here. Telecom equipment players pointed out that these have made it difficult for them to increase value-addition in telecom equipment. And this also does not allow foreign telecom gear-makers in India to participate in government procurement because of the conditions of high-value addition required for being eligible. The government is planning to make these value-addition norms even tougher as it pushes for Make in India. The discussions took place in a webinar organised by the Broadband India Forum on the new PLI scheme announced for telecom equipment recently.
Kant pointed out: “Manufacturing companies must realise that they are in a globalised world today and FTAs, bilateral trading relationships will stay. But saying that everything is getting imported through FTAs is not a right approach. Problem is that Indian manufacturers should not promote protectionism.”
He told the telecom equipment-makers that they “should have the guts and the courage ” to take on global competition and advised the telecom companies to “have atma vishwas (self-confidence).”
Kant pointed out that the global supply chain is in a flux as most countries are looking at alternatives and reducing their dependence on one country (meaning China). “We will never be able to seize this opportunity if we don’t move.”
Telecom equipment-makers also demanded that the production-linked incentive scheme be linked to the preference to Make in India (PMI) scheme as global players with manufacturing facilities in India are finding it difficult to participate in government procurement orders. They suggested that the PMI scheme should be leveraged to enable exports — one way being to grant points to the total value of exports that can be used by them to qualify more easily for government procurement contracts.
Kant said that a meeting with telecom equipment-makers will be called next week on this demand. Business Standard News