Ruining Domestic Manufacturing Prospects?

The government's inclination to succumb to the international pressure and give up on its mandate of promoting indigenous manufacturing will add to the negative sentiments in the industry, believe experts.

In the National Telecom Policy (NTP), the government had proposed that 50 percent of all core telecom network equipment will have to be developed locally.

"The government takes one step forward and two steps backward. This move is not going to help anyway. Why should we succumb to the pressure formed by any outside government? The government has been inconsistent with its National Telecom Policy objectives," says Ashok Agarwal, Director-General, TEMA.

According to industry experts, the move will also make a dent in the country's employment fortunes since a large chunk of India's workforce is still uneducated and employed as laborers. The 50-percent clause would have given them an opportunity to grow. Not only this, promoting indigenous manufacturing would have given a shot to domestic entrepreneurship and to autonomous bodies like Centre for Development of Telematics (C-DOT) and ITI Ltd. to foster innovation.

This development has been called hilarious by a telecom expert who questions the government's logic over this move. "We all know that consistent lobbying has been going on against this clause from all the top vendors. And it is a sad situation. The fact is we do not have the right technology locally and there is no developed platform, hence the move might have given a hope to the local manufacturing industry. But my argument is - why do you give false hope to the industry if you only plan to play passing-the-buck game?" says a telecom industry expert on condition of anonymity.

Considering that most of the top telecom equipment vendors are facing tough margins across the world, there has been strong resentment amongst them to support country's domestic manufacturing objectives. A top telecom vendor, however, claims that they are ready to help and grow the domestic manufacturing ecosystem locally. However, since the country is far behind the technology levels of the international equipment vendors, the government needs to take up a step-by-step approach.

- Jatinder Singh, Principal Correspondent, Light Reading India