As per the report dated 7-11-2011 published in The Economic Times, the US Under Secretary for international trade Francisco Sanchez told at a CII(Confederation Of Indian Industries) event in Delhi that many of the policies of India are designed to protect Indian industries and they will only hurt them in the long run. He told policy decisions seemed to tilt the playing field away from US businesses and other foreign businesses. He told that India’s recent policy directions and proposals limit its markets to develop domestic manufacturing capacity. He told that the local content requirement system denies Indian companies the opportunity to access quality products from outside the country and it could end up hindering growth and missed opportunities.
This means India should not give any preferential treatment to domestic industries. No condition should be imposed for preference to domestic products while procuring manufactured goods. This is nothing but demanding destruction of domestic industries.
We know that in telecom sector after the advent of liberalisation policies resulting in the domination of private companies , telecom equipment is almost entirely procured (to the extent of 90%) from foreign vendors resulting in the destruction of domestic telecom equipment manufacturers like ITI etc. Due to pressures from trade union movement and domestic producers, the Government of India is thinking of taking certain steps to give preferential treatment to domestic products. But it is immediately putting certain riders on it like the preferential treatment is subject to international commitments. Thus the Government is pulled by mutually opposing forces, for and against preferential treatment to domestic products. At present the pull of the forces against such preferential treatment is more strong than those in favour of it. This is resulting in the declarations of the Government in favour of preferential treatment to domestic products becoming empty declarations.
A serious struggle is required by all the forces interested in encouraging domestic products and self reliance in order to overcome this situation.
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