ITA an obstacle for local electronic manufacturing

The ITA has resulted in trade imbalances and DeitY has also flagged the rising security implications of IT goods being imported in the country under the ITA, a senior govt official said

New Delhi, April 2: Information Technology Agreement ( ITA), which India joined in 1997, has proved to be a barrier for the domestic electronic manufacturing sector’s growth and led to “domination of few companies” in the market.

The agreement has also resulted in trade imbalances and Department of Electronics and IT ( DeitY) has also flagged the rising security implications of IT goods being imported in the country under the ITA, a senior government official said.

Information Technology Agreement is a plurilateral trade agreement, which deals with IT products ( electronics). About 75 WTO ( World Trade organisation) countries are sig- natories to it including the US, China, Japan, and all the 27 European Union nations.

“Domestic manufacturers face hardships due to lack of an eco- system compared to their foreign competitors, who are able to produce products at a lower cost. The ITA has resulted in a sharp decline in investments in electron- ic hardware manufacturing in India and a dependence on imports,” he said.

A total of 217 IT products are part of ITA, which covers almost all electronic goods including IT hardware and telecom products.

Another official said if the electronics market in India is studied, the agreement has resulted in domination by few companies for most ITA products like semiconductors, mobile phones, memories, displays, telecom equipment, PCs, laptops, tablets, among others. Without naming the firms, the official said: “This has reduced competition and given undue influence to major companies to dominate the market here.”