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November 17, 1997


Phoren fancy

Only foreign equipment "acceptable", say govt tenders

The Indian government's interpretation of globalisation may be a wee bit too liberal. Government departments and public-sector companies, floating open tenders for purchase of information technology hardware, specify that certain multinational brands are "acceptable".

For instance, an Indian Farmers Fertiliser Cooperative Limited tender, floated recently for computers and cabling equipment, specifies brands such
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as IBM, Dell, Compaq, HP, Acer, AST, Unisys and Digital as the acceptable brands for servers and PC-ATs. For inkjet printers, it has specified not just one brand but also a particular model, the HP 690C.

According to industry sources, this is just one of the many tenders asking for only MNC brands, thereby obviating the presence of Indian brands.

They feel that this trend, which has been in existence for about eight months now, is slowly assuming larger proportions.

While the sources are not clear whether specifying certain brands in open tender can be termed a restrictive trade practice; they are unanimous in feeling that it will be deleterious to domestic brands of computers and peripherals.

The Manufacturers' Association for Information Technology, whose members represent a whole range of IT manufacturers and vendors, is taking up the issue. In a letter, circulated among members, it has said that such specifications are unfair, and has asked them to inform the association of any such tender they receive.

MAIT Deputy Secretary Vinay Mehta has said that in just a month "bunches" of such tender documents have been received. Complaints include public sector companies like the National Thermal Power Corporation, West Bengal State Electricity Board, New Delhi Electricity Board (northern region), National Dairy Development Board and State Bank of India.

"This is a discriminatory practice and is unfair to our strong domestic brands such as HCL, Wipro and Zenith. It is not a transparent tender process. We are going to take up this issue with the organisations concerned apart from the public awareness that we are trying to create through public forum," Mehta said.

Apart from a general presumption that an MNC brand is superior, he said the trend could be fuelled by the fact that government buying is contagious. If one department implements some systems, another government department will want to go along the same lines, he said.

They have to realise that many Indian brands offer competitive quality of computers and peripherals at a cost advantage, he said.

As far as legal implications are concerned, the association and some prominent IT manufacturers feel it could be a case for the Monopoly and Restrictive Trade Practices Commission and that the organisations concerned can be sued.

HCL President Ajai Chowdhary agrees that the MRTP should take a look. A recent tender floated for systems integration by Australia's central revenue department has specifically asked for locally manufactured PCs.

"This is a case where the government went on record in the press, saying it wants to promote domestic industry. And here, in our country, the reverse seems to be happening,'' he lamented.

But legal sources say that in an open economy there is no such restriction on any company. Any company, may it be public or private, has the full discretion to specify and ask for MNC brands or imported goods in its tender documents.

The competition is open to the vendors.

But the one argument to which the industry is sticking to is that the trend is anything but healthy and if let to grow it will affect the business of the thousands of companies dealing exclusively in Indian brands. Take the case of HCL. It has about 800 dealers.

All this assumes much greater significance because the government, public sector and education and research institutions comprise 50 per cent of the IT consumers in the country.

- Compiled from the Indian media

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