Electronic goods makers will have to submit value addition certificate

Manufacturers have to submit them every year to get advantage of preferential market access

The government has decided that all domestic manufacturers of electronics equipment will have to provide certificate of value-addition every year to get the advantage of preferential market access (PMA) policy.

Earlier, the Government had proposed that the domestic makers of electronic equipment should require providing certificates of proof every six months. The companies should ne certified by the statutory auditors of the domestic manufacturers, according to a recent communication of the ministry.

Besides, the Department of Electronics and Information Technology will set up one or more industry committees which will advise the department regarding the profit, freight, insurance and handling charges or typical globally accepted value addition norms for each product or verticals or any other specific references made to it.

A technical committee may also be constituted by the concerned ministry or department to make recommendations on the domestic value addition.

According to the communication, the minimum percentage of domestic procurement for any electronic product notified by the Government is 30%. The percentage of total procurement value for which preference is provided to the domestic manufacturers should be fixed that competition is maximised, but the domestic manufacturers should be encouraged.

The PMA policy is to notify all electronic products which are procured by the Government and Government agencies for governmental purposes and not with a view to commercial resale or with a view to use in the production of products for commercial use. The policy would also cover electronics products that are being used as subsystem.

As per the Government discussion, a managed service provider (MSP) for the Government would provide information technology and communication related services by establishing infrastructure by integrating equipment vendors who provide such services.
Meanwhile, a lot of foreign telecom firms and their business associations, including players from across Europe, Australia, Asia and the United States, have recently written to Prime Minister Manmohan Singh expressing concern over draft notification for Preferential Market Access (PMA) Policy, they have again written to the PM seeking his intervention.

As per the notification of the Department of Telecommunications (DoT), on October 30, 2012, private telecom operators or licensees, specifically by requiring all government licensees and managed service providers, will have to give preference to domestically manufactured telecommunications products if that have “security implications”.

The US-India Business Council (USIBC) and 37 other business groups and companies from around the world had repeatedly asked the Indian Government to rescind the PMA Policy and avoid “market-distorting policies”.