A decision to put on hold the policy, called preferential market access (PMA), till further orders was taken by a high-level committee, headed by Shivshankar Menon, the National Security Adviser to the Prime Minister. Finance Secretary R S Gujral, Commerce Secretary S R Rao and others attended the meeting, those in know of the development told Business Standard.
The Cabinet on February 2, 2012, approved a PMA policy. It calls for using indigenously manufactured products to mitigate the threat of cyber espionage in segments that can have security implications.
The Telecom Regulatory Authority of India also recommended an increase in the use of domestically produced equipment in telecom networks due to security reasons. A notification of the department of telecommunications (DoT), on October 30, 2012, said private telecom operators or licensees would have to give preference to domestically manufactured telecom products if there were “security implications” at stake.
The PMA policy has been sharply criticised by foreign companies and trade associations. The US-India Business Council and 37 other business groups and companies from around the world had repeatedly asked the government to rescind the decision and avoid “market-distorting policies”.
Also, the GSM telecom services industry body, the Cellular Operators Association of India, had called for a review. DoT had issued a draft notification for the PMA but is yet to come out with the final version.
Domestic telecom equipment makers, on the other hand, have sought the Prime Minister’s intervention to help expedite the notification on PMA. “We are seriously concerned that despite cabinet approval of PMA, which happened almost 16 months back...The final notification for implementing PMA on security considerations has not yet been released,” the Telecom Systems Design and Manufacturers Association (TDMA) said in a letter to the PM. Its members include Shyam Telecom, Tejas Networks, Matrix Comsec, Vihaan Networks, Inventum Technologies and Pulse Engineering.
TSDMA said the current telecom systems are highly sophisticated, using complex chips with millions of elements, along with long software codes.
“In such systems, any post facto security testing, screening or audit is highly ineffective, since it is very easy to implant spyware/malware in hardware and software, which is impossible to detect but can easily intercept sensitive information or cause catastrophic damage to critical equipment,” it said.