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DoT keeps in abeyance order adding SD-WAN routers, switches in must procure locally list

01:06 PM Oct 03, 2021 | PTI

The Department of Telecommunications (DoT) has kept in abeyance its order that had expanded the list of telecom products a government entity must procure only from local manufacturers.

The DoT in an August 31 order included SD-WAN routers and switches, which are used to connect remote branches and data centres, and two dozen other telecom gears in the Public Procurement (Preference of Make in India), Order 2017 and allowed usage of imported components in them.

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The "notification... dated August 31, 2021 issued by the DoT is kept in abeyance till further orders," an office memorandum of September 27 said.

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The telecom department did not immediately give any reasons for doing so.

The August 31 order stated that only local manufacturers were being allowed in procurement tenders because there exists "sufficient local capacity and local competition". However, it allowed use of imported components in the telecom products, giving opportunity for foreign vendors also to qualify as local manufacturers even with miniscule amount of local value addition.

State-owned banks in tenders floated after the August 31 order made reference to preference to domestic manufacturers but did not explicitly call for such procurement from Indian firms only, industry sources said.

Not mandating only 'Make in India' companies to offer equipment in effect allowed global players to also participate in the tender, defeating the very purpose of the policy, they said adding questions were raised over the tenders floated by some of the state-owned banks not meeting the 'Make in India' norm.

The banks in question, they claimed, stood their ground in not seeking only Make in India bidders. Just as this happened, the DoT kept in abeyance the August 31 order.

Besides SD-WAN Routers, other products notified in the August 31 order included ethernet switches, IP-based soft switches, wireline PABXs, leased-line modems, Wi-Fi based broadband wireless access systems, Wi-Fi Access Controller, radio system, repeaters, satellite phones, optical fibre and telecom batteries.

Domestic telecom gear makers body TEMA said that the order issued allowing use of imported components was against domestic industry, anti-Aatmanirbhar Bharat (self reliant India) vision and against the policies envisioned by the Prime Minister.

When contacted, Telecom Equipment Manufacturers' Association of India (TEMA) chairman emeritus NK Goyal said that the earlier order created some misgivings with regard to treating imported components as local contents, when assembled in India and qualified for preferential market access (PMA) policy.

"TEMA would also like to submit that the production linked incentive (PLI) scheme envisages only two criteria - investment and turnover. The PLI scheme does not envisage commitment for local contents, exports, jobs. TEMA welcomes manufacturing under PLI, yet in the absence of domestic value addition and local contents, they need to follow PPP MII guidelines to avail benefits of PMA," Goyal said.

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