DoT considers Chinese model to develop domestic tech sector

1 Jul 2014

Telecoms regulator the Department of Telecommunications (DoT) is expected to accept advice from science and technology institutions to adopt China’s model for boosting the domestic telecom manufacturing sector, the Economic Times reports. The DoT is looking to improve India’s involvement in the global telecom industry, with a view to reducing the nation’s dependence on imported goods. According to the watchdog, India’s current contribution to worldwide intellectual property rights (IPRs) is ‘practically nil’. Earlier this month, an internal government presentation noted that: ‘India is merely a screwdriver assembly operation for [multinational corporations], since very little value addition happens locally, and the IPRs reside with foreign companies.’

Whilst the government is toying with the idea of offering tax holidays and financial incentives to domestic vendors, as well as more extreme measures such as procurement quotas forcing providers to source a certain amount of their equipment from Indian suppliers, the DoT is also now considering pouring funds into research and development (R&D), IPR and product development, on the advice of the Indian Institute of Technology, Indian Institute of Science and the Indian Institute of Management-Ahmedabad. In a note to the regulator, the institutions pointed out that: ‘China has helped its local telecom companies generate a majority of IPRs in [next generation] technologies through proactive support to R&D and innovations, since telecom technologies are IPR-driven.’ As such, the trio urged the government to use a portion of the proceeds from spectrum auctions to establish an INR170 billion (USD2.83 billion) fund to aid R&D, entrepreneurship development and product manufacturing.