The United States has raised strong objections over the growing use of local content requirements in telecom sector in India and some other countries, saying these constitute a major barrier for American equipment manufacturers.
A report from US Trade Representative focusing exclusively on the telecom sector also brings up certain other issues, including problems faced by US operators offering satellite capacity to customers in India, noting that Washington would take up these matters with New Delhi in the coming year. “These impediments include the requirement to sell satellite capacity exclusively through government-owned suppliers,” it said.
Releasing the report, Acting USTR Demetrios Marantis said recent years have witnessed “a growing trend among our trading partners to impose localization barriers to trade designed to protect, favour, or stimulate domestic industries, service providers, or intellectual property (IP) at the expense of imported goods, services, or foreign-owned or developed IP”.
According to him, the review highlights the concern that US equipment manufacturers may be disadvantaged by the growing use of local content requirements in countries such as India, Brazil and Indonesia.
Commenting on the impediments reportedly faced by US satellite operators both in India and China, the report speaks of continuing lack of transparency in the rules governing the provision of satellite capacity in these countries.
“The requirement to sell capacity only through government-owned satellite operators is problematic,” it says, adding USTR will continue to raise concerns regarding the barriers with New Delhi and Beijing and urge them to consider changes to their respective frameworks.
The report also takes exception to India implementing measures under its Preferential Market Access (PMA), indicating domestic purchase mandates for “electronic products which have security implications”. It goes on to say that the initial draft lists of these products cover an unduly broad range of electronic products, calling into question whether security concerns are the primary motivation for imposing such requirements on private firms.
It also criticizes the clauses for Direct-to-Home (DTH) subscription television services, commenting: “Thwarting foreign suppliers from developing direct relationships with DTH licensees does not appear justified and is of concern to USTR, as it puts US suppliers at a competitive disadvantage and deprives the DTH licensees a fuller range of service offerings.”
The only area where the report commends India relates to the Telecom Regulator Authority of India’s “positive steps in 2012 to reduce access and co-location charges at India’s submarine cable landing stations”. At the same time, the USTR has urged TRAI to amend the proposed methodology to ensure that charges do not include costs for equipment that is not required for most access arrangements. It also wants the regulator to officially publish the new revised fees as soon as the consultation process with industry is complete.