WASHINGTON, DC – July 8, 2013 – The U.S.-India Business Council (USIBC) applauded the Prime Minister’s announcement to put a hold on India’s Preferential Market Access (PMA) policy, pending  further study. In the press note released by the Prime Minister’s Office, the entire PMA policy will be reviewed and will not impose domestic manufacturing requirements on the private sector. India’s Department of Electronics and Information Technology (DEITY) is expected to draft a revised policy in the next four weeks.
USIBC has consistently argued for market-based incentives, not mandates, to encourage manufacturing in India; specifically, USIBC supports carving out the private sector from any preferential market access manufacturing policy being considered by the GOI. USIBC President Ron Somers said, “India’s rethink of its PMA policy sends a strong and welcome signal that India is listening to investors and that channels of communication through organizations such as the U.S.-India Business Council are working.”
Investors world-wide had requested India to reconsider its policy to mandate manufacturing of electronic goods in India. The rationale behind India’s PMA policy was to force indigenous manufacturing to create jobs in India, and to prevent any security breaches to India’s vast telecom and IT sector. American and international firms argued the flawed policy would not help in either case. 
“There are many U.S. companies manufacturing in India, and they want to expand,” said Somers, “but they want to do so based on market-based principles, including adequate infrastructure, business-friendly policies, and access to a skilled workforce —all elements associated with a free-market economy. A mandated approach will only drive job creators away.”
American firms and USIBC had argued that any reference to private sector mandates should be excised from any policy. Regarding security, USIBC has suggested that high-level dialogues be convened to share best practices and protocols about how India and the United States can bolster security—a concern facing both nations.
Formed in 1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council (USIBC) is the premier business advocacy organization advancing U.S.-India commercial ties. Today, USIBC is the largest bilateral trade association in the United States, headquartered in Washington, DC, with liaison presence in New York, Silicon Valley, and New Delhi, comprised of more than 350 of the top-tier U.S. and Indian companies. USIBC celebrates its 38th Anniversary in Washington, DC on July 11. Ajay Banga, President & CEO of MasterCard, is USIBC’s chairman.

Press Release