Washington: Expressing serious concerns over new Preferential Market Access (PMA) rules by India, international trade associations representing several global companies have asked Prime Minister Manmohan Singh to revisit the policy.
   
In a letter, they said these new rules are "inconsistent" with New Delhi's WTO obligations.
   
"We urge the Government of India to rescind this PMA entirely and initiate a consultation process with the private sector and other stakeholders to more effectively address India's security and economic concerns," said the letter that was released to the press on Monday.
   
"If the PMA applies to private entities, this would represent an unprecedented interference in the procurements of commercial entities and would be inconsistent with India’s WTO obligations," said the letter to the Prime Minister dated April 4.
   
"We urge the Government of India to rescind this PMA entirely and initiate a consultation process with the private sector and other stakeholders to more effectively address India's security and economic concerns," said the letter that was released to the press on Monday.
     
The groups urged the Indian government to reconsider its new preferential market access (PMA) rules that they claimed would tip the scales strongly in favour of domestically manufactured electronic goods for government purchase.
   
The groups also noted the potential application of these rules to private entities, including "telecom licensee" and "managed service provider," which they said would contravene the WTO.

The letter said, "India has exemplified the benefits of competition and regulatory reform as demonstrated by the tremendous growth in the telecommunications and IT services sector over the past fifteen years.
   
"We urge India to remain, and push forward, on this path. India's economic growth and ability to continue to be competitive in the global ICT sector depend on it," it added.
   
Indian industry has demonstrated its capacity to compete on a global scale through its growing participation and influence in global markets, the letter said.
   
It also said, "India should avoid policies that would unnecessarily restrict competition at home which could also spark reciprocation by other countries that enact similar regulations".
   
Such a result could negatively affect the ability of Indian ICT companies to export their products and services.
   
It would be ironic if the rule intended to help Indian industry ultimately hurt its exports abroad, the letter stated.
   
The Information Technology Industry Council (ITI), Telecommunications Industry Association (TIA), US-India Business Council (USIBC), and 32 other associations from the US, Europe, Japan, Canada, Australia, Hong Kong, and Korea have jointly sent the letter to Singh.
   
The PMA rules culminate a series of similar Indian policy proposals during the past year that have "proposed discriminatory government procurement policies" as a means to stimulate domestic manufacturing of electronics and telecommunications equipment at the expense of foreign companies, it said.

The groups urge India to rescind the PMA and initiate a consultation process with the private sector and other stakeholders to develop policy approaches that will promote ICT sector growth without creating market-distorting policies.
   
"India's discriminatory preference policies work to undermine what has been a mutually beneficial relationship between India and the global tech sector.
   
"That country's economic strength and technical sophistication have led all of the world's major tech companies to invest there and deliver products and services that positively impact how its citizens work, play and participate in its democracy," said Dean Garfield, ITI president and CEO, said.
   
"Left unchecked, these policies carry with them the very real potential for a contagion effect, encouraging the Indian government to issue similar policies affecting other sectors and providing rationale for other countries to mirror this unfortunate behaviour," he said.
   
TIA President Grant Seiffert said, in recent years, India's telecommunications market has "exploded, connecting hundreds of millions of Indian citizens who previously never had access to telecommunications and spawning a world class Indian IT services industry".
   
"India's PMA threatens the ability of India's telecommunications service providers to cost effectively build out their networks and serve India's enterprise and individual consumers in a cost competitive basis," he added.
   
Seiffert further warned that "India's PMA threatens to kill the proverbial goose that laid the golden egg of India's successful ICT services industry.
   
USIBC president Ron Somers said, "If the discriminatory mandate applies to private sector procurement it will not only restrain direct foreign investment into India but also violate the nation's WTO obligations.

(Agencies)