The government said that it has taken steps to promote Research and Development (R&D) in manufacturing and to meet the demand of quality telecom and electronic equipment domestically.

As part of these initiatives, government has allowed 100% FDI under automatic route for telecom equipment manufacturing, Milind Derao, Minister of State for Communications and Information Technology told Lok Sabha on Wednesday.

He said no Industrial license is required for the manufacture of telecom equipment. Simple Industrial Entrepreneur Memorandum (IEM) has to be filed with Secretariat for Industrial Assistance (SIA).

Apart from this payment of any technical know-how fee and royalty for technology transfer is under automatic route.

Department of Telecommunications has set up seven Telecom Centres of Excellence (TCOE) in Public Private Partnership (PPP) mode in seven premier academic institutes of the country.

Deora said that the Government has approved National Telecom Policy-2012 (NTP-2012) to address various issues related to telecom sector including telecom equipment manufacturing.

The Telecom Equipment Manufacturers Association (TEMA) had raised concerns of national security due to induction of large scale imported telecom equipments in the network.

TEMA felt that the developer/ vendor may have inserted irrelevant software modules in the beginning itself while installing the Communication system maliciously or inadvertently to control the system at a later date.

The industry body believe that the network is susceptible to the threats like data mining/harvesting, information leak, service denial and degradation of service, abuse and fraudulent use of telecommunication resources and long term technological dependence.

To address the national security concerns related to telecom and telecom network, government has issued comprehensive security guidelines by way of license amendment for Access Service Providers and for other service providers.

According to the guidelines are, the Licensee shall be completely and totally responsible for security of their networks. They shall have organizational policy on security and security management of their networks. 

The Licensees shall audit their network or get the network audited from security point of view once a year from a network audit and certification agency. 

The licensee shall induct only those network elements into his telecom network, which have been got tested as per relevant contemporary Indian or International Security Standards. From 1st April 2013 the certification shall be got done only from authorized and certified agencies/labs in India, the guidelines say. The licensee shall employ only Resident, trained Indian Nationals on key positions. 

As per the report of the Working Group on the Telecom Sector for the 12th Five Year Plan, the volume of the business of telecom equipment is stated to be of the order of Rs.2,50,000 crore by the end of 12th Five Year Plan.