India should not embrace protectionist policies:US telecom

In order to attract investment, Indian Government should continue a policy approach that is pro-competition and pro-growth and not embrace policies that rely on protectionism, the American telecom industry said Friday.

"The telecommunications sector is an important contributor to India’s continued economic growth and job creation through both domestic and export-oriented economic activities," the Telecommunications Industry Association (TIA) said in its comments submitted to the US International Trade Commission (ITC).

TIA is the leading association representing the manufacturers and suppliers of high-tech communications networks.

The US ITC is conducting an investigation regarding industrial policies of the Government of India on whether they discriminate against US imports and investment in order to support Indian domestic industries, and the effect that those barriers have on the US economy and US jobs.

"It must be noted that in order for India to enhance its competitiveness in the global ICT sector and to further encourage investment, the Government of India should continue a policy approach that is pro-competition and pro-growth, and not embrace policies that rely on protectionism," TIA said.

In its submission, TIA said it continues to be concerned that "there is an underlying trend in India to implement policies that would reverse" the pro-growth and pro- competition policy trajectory that has  benefited India in favour of policies that would seek to make India’s ICT market less competitive, as well as establish barriers to trade and investment.

"In particular, we would note the growing use of policies that can be described as localisation barriers to trade to meet the Government of  India’s objective of encouraging domestic manufacturing of telecommunications equipment, including in provisions of the 2012 National Telecom Policy and the 2011 National Manufacturing Policy,” it said.

In its submission, the TIA said, it "encourages the Government of India to reject preference policies, quotas, and other trade barriers that run counter to the market opening reforms that India has implemented in the past, which provided the catalyst for the unprecedented economic growth the country has experienced in recent years".

Furthermore, TIA said it encourages India to continue to adopt global standards rather than mandatory national standards, which  will inhibit India’s long-term growth.

TIA said it urges India to continue to build on the reforms in the telecommunications sector that have been so successful and to continue to focus on a policy approach to improve the overall commercial environment – regardless of the sector.

These broad policy approaches could include market- oriented incentives to further develop India’s infrastructure and encourage investment in India’s ICT (Information and Communication Technology) manufacturing ecosystem, it said.

"Other areas could include simplification and transparency in India’s customs tariffs, adopting global norms in government procurement that are best exemplified by the WTO Government Procurement Agreement, and adopting a simplified national tax system, it said.

"TIA encourages the governments of India and the United States to continue to engage bilaterally, and with the ICT industry in India and globally, to find ways to build upon the important commercial relationship between our two countries,” it said.