Preference to cyber security products by domestic firms

The government has mandated giving preference to locally produced cyber security products in all public procurement where intellectual property rights are owned by companies or start-ups incorporated in India.

The Ministry of Electronics and Information Technology (MeitY) said in an order that it "hereby notifies that Cyber Security being a strategic sector, preference shall be provided by all procuring entities to domestically manufactured/produced Cyber Security Products".

The notification, issued earlier this month, is based on Public Procurement (Preference to Make in India) Order 2017 which aims at enhancing income and employment in the country.

According to the order, the preference will be granted to a company which is incorporated and registered in India or startup firms that meet the definition as prescribed by the Department of Industrial Policy and Promotion (DIPP), provided the revenue from the product and intellectual property (IP) licensing accrues to the firm in India.

Firms claiming to own IP for the product will be required to furnish evidence of the ownership as per the rule.

However, the order notes that IP registration is not mandatory in the country but a firm claiming benefit under the order should have the right to use and commercialise product without third party consents, distribute and modify it.

The new order will be applicable to all ministries and departments under the central government. Meity will be nodal ministry for implementation of the cyber security product notification.

Reacting to the notification, cyber security firm Innefu Labs said that preferential market access for cyber security may become the backbone for India's national and economic security in the future.

"It is imperative for a country to use and promote indigenous cyber security products to protect our information space as well as bring economic prosperity. US, China and Russia have already started this process and it's high time India follows suit," Innefu Labs co-founder Tarun Wig said.

"These are the initial steps to achieve our goals and if the various parts of government can come together to implement this sincerely it may change the course of the future," he said.

As per the order, resellers, dealers, distributors, implementation or support services agencies of products -- which may have limited rights to IP to enable transfer of rights to use, distribute and modify -- will not be eligible for getting preference under the scheme.