PMA Policy in Private Sector to be reviewed, notifications kept in abeyance

In a meeting held in PMO attended by the National Security Adviser, the Cabinet Secretary and the Principal Secretary to PM, and by officers of all concerned Ministries, a decision was taken to review the Policy for Providing Preference to Domestically Manufactured Electronic Goods (PMA Policy), particularly PMA in the private sector.

2. The PMA Policy has two aspects, one relating to government procurement and the other relating to private sector procurement. There are no international commitments affecting government procurement.  However, private sector procurement policies are covered by India`s obligations in the WTO. However, restrictions are permissible even in the private sector in essential security interests.

3. Concerns have been raised in many quarters on different aspects of the PMA Policy, particularly policy relating to procurement by the private sector for electronic products with security implications.

4. Notifications giving the guidelines regarding PMA in Government Procurement for products covered by DeitY andDoT have been issued to all Ministries. No other Ministry has issued Notifications in this regard. While DeitY and DoT have notified 6 and 23 products  respectively,  their implementation is yet to commence.

5. Notifications giving the guidelines regarding PMA procurement by the Private Sector of  electronic products with security implications are yet to be issued. DoT has proposed to notify 14 telecom products under this category and the draft guidelines are in the public domain. (Click here for guidelinesClick here for list of 14 products)

6. After a detailed discussion on the current provisions of the PMA Policy, and the pros and cons of alternative approaches to handling security related products, the following decisions were taken:

(i) The entire policy on Providing Preference to Domestically Manufactured Electronic Goods (PMA Policy) will be revisited and reviewed.

(ii) The overall policy on PMA will be recalibrated and submitted to the Cabinet.

(iii) No notifications on PMA in the private sector on security related products will be issued till the PMA Policy is reviewed and any notifications in the draft stage will be withheld.

(iv) The revised proposal will incorporate a detailed provision for project / product / sector specific security standards, alternative modes of security certification, and a roadmap for buildup of domestic testing capacity.

(v) The revised proposal on PMA in the private sector for security related products will not have domestic manufacturing requirements, percentage based or otherwise.

(vi) The revised proposal will incorporate a mechanism for a centralised clearing house mechanism for all notifications under the PMA Policy.

(vii) The National Security Council Secretariat will provide a definition of “security” for usage in the context of security related issues concerning products, projects or sectors.

(viii) DeiTY will bring a final Note to the Cabinet on the revised policy within 4 weeks.

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