Telecom minister Kapil Sibal on Thursday held discussions with industry representatives on promoting IT and electronics hardware manufacturing and favoured that the Finance Ministry should provide fiscal incentives for the purpose, sources said.

They said Sibal was of the view that fiscal incentives must be provided by the Finance Ministry to telecom service providers for using local products to promote manufacturing.

Telecom regulator Trai, in its recommendations for Telecom Equipment Manufacturing Policy, has suggested rebate for service providers if they use a certain percentage of their total procurement of indigenously manufactured products.

Service providers have, however, expressed disagreement with Trai's views.

Sources said a leading telecom company is said to have opposed the recommendation citing liberalised market bindings of India after it became member of World Trade Organisation.

They said Sibal was of the view that preferential access to domestic products is not in violation to WTO norms and the ministry was doing everything within the ambit of WTO.

The minister reiterated that there is a chronic shortage of electronic components in the country and steps need to be taken to encourage local manufacturing.

He also stressed upon the need for funding research and development to create domestic IPRs (Intellectual Property Rights).