{"id":249925,"date":"2023-06-28T20:22:04","date_gmt":"2023-06-28T14:52:04","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=249925"},"modified":"2023-08-31T16:12:34","modified_gmt":"2023-08-31T10:42:34","slug":"the-concerns-about-india-u-s-digital-trade","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-concerns-about-india-u-s-digital-trade\/","title":{"rendered":"The concerns about India-U.S. digital trade"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cThe concerns about India-U.S. digital trade\u201d <\/strong>published in \u201cThe Hindu\u201d <\/strong>on 28th June 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS2- Bilateral groupings and agreements<\/p>\n

Relevance- <\/strong>India and US bilateral relationship<\/p>\n

News<\/strong>– During Prime Minister Narendra Modi\u2019s U.S. state visit, cooperation on technology emerged as a prominent outcome.<\/p>\n

What is the current status of India-U.S. technology trade?<\/strong><\/h2>\n

In FY2023, the U.S. emerged as India\u2019s biggest overall trading partner<\/strong>. The bilateral trade<\/strong> was $128.55 billion in 2022-23.<\/p>\n

However, digital or technology services<\/strong> did not emerge as a prominent sector of bilateral trade<\/strong>. The U.S. had a $27 billion deficit in trade in digital services<\/strong> with India in 2020.<\/p>\n

In the recent past, the two countries have been ramping up their tech partnership through moves like <\/strong>the iCET<\/strong><\/a>. <\/strong><\/p>\n

Under the iCET, India and the U.S. also established a Strategic Trade Dialogue<\/strong>. It is focused on addressing regulatory barriers<\/strong> and aligning export controls<\/strong> for smoother trade and deeper cooperation in critical areas.<\/strong><\/p>\n

What are the concerns raised by U.S. tech firms?<\/strong><\/h2>\n

The CCIA in its note has talked about the \u201csignificant imbalance\u201d and \u201cmisalignment\u201d in the U.S.-India economic relationship. <\/strong><\/p>\n

The U.S.\u2019s market access, trade and openness<\/strong> to Indian companies to operate in the U.S. has not been reciprocated<\/strong> by the Indian side. The Indian government has deployed a range of tools by their protectionist industrial policy.<\/strong><\/p>\n

It cites the example of India\u2019s guidelines on the sharing of geospatial data<\/strong>. It provides preferential treatment<\/strong> to Indian companies.<\/p>\n

It has also expressed discontent over India\u2019s moving away from longstanding democratic norms and values<\/strong>, and government censorship and control over political speech.<\/strong><\/p>\n

What are US firms’ concerns over taxation measures in India?<\/strong><\/h2>\n

U.S. tech firms have concerns related to the \u201c<\/strong>equalisation levy<\/strong><\/a>\u201d<\/strong> that India charges on digital services.<\/p>\n

In 2020, the Centre came out with the \u2018Equalisation Levy 2.0\u2019<\/strong>. It imposes a 2% tax on gross revenues<\/strong> received by a non-resident e-commerce operator<\/strong> from the e-commerce services<\/strong> to Indian residents.<\/p>\n

The equalisation levy led to double taxation<\/strong> and further complicated the taxation framework. <\/strong>Besides, there are questions about the constitutional validity and compliance with international obligations. <\/strong><\/p>\n

What are US firms’ concerns about India\u2019s IT Rules 2021?<\/strong><\/h2>\n

The IT Rules place compliance burden on social media intermediaries (SMIs) and platforms. several U.S. firms end up falling under the ambit.<\/p>\n

Some points of concern raised are the impractical compliance deadlines and content take-down protocols<\/strong>. The IT Rules require intermediaries to take down content<\/strong> within 24 hours upon receiving a government or court order.<\/p>\n

The platforms are also required to appoint a local compliance officer. <\/strong><\/p>\n

There is a major criticism against the government\u2019s institution of the three-member Grievance Appellate Committees<\/strong> to hear user complaints.<\/p>\n

What has been flagged in the new draft of the data protection law?<\/strong><\/h2>\n

There are ambiguities about cross-border data flows, compliance timelines, and data localisation requirements.<\/strong><\/p>\n

Data localisation requirements<\/strong> by governments significantly increase operating costs<\/strong> of companies. These can be seen as discriminatory by foreign companies<\/strong>.<\/p>\n

Foreign tech companies like Meta or Amazon operating in India find it convenient to store their data <\/strong>wherever they have their servers.<\/p>\n

Section 17 of the draft Act<\/strong> says that cross-border flow of data<\/strong> will only be allowed for a list of countries<\/strong> notified by the Centre. On what basis<\/strong> will these countries be notified and what the terms<\/strong> for such transfers will be is not mentioned in the draft.<\/p>\n

What have firms said about the Telecom bill?<\/strong><\/h2>\n

As per CCIA, the draft Telecommunications Bill, 2022<\/strong> would redefine \u201ctelecommunication services\u201d<\/strong> to include a wide range of internet-enabled services.<\/strong> These services have little resemblance to the telephony services.<\/strong><\/p>\n

The current draft of the Bill puts both Telecom Service Providers (TSPs) and Over-the-top (OTT) communication <\/strong>services under the definition of telecommunication services. <\/strong><\/p>\n

The proposed law would subject a number of platforms to obligations such as licensing requirements; government access to data; encryption requirements, internet shutdowns, seizure of infrastructure, and possibly monetary obligations for the sector<\/strong>.<\/p>\n

What are the other policy barriers?<\/strong><\/h2>\n

Last year, the Parliamentary Committee on Finance Proposed the adoption of a \u201cDigital Competition Act\u201d<\/strong> to address anti-competitive practices <\/strong>by big tech companies.<\/p>\n

The CCIA says that the proposal appeared to be largely targeted at U.S. tech companies<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cThe concerns about India-U.S. digital trade\u201d published in \u201cThe Hindu\u201d on 28th June 2023. Syllabus: GS2- Bilateral groupings and agreements Relevance- India and US bilateral relationship News– During Prime Minister Narendra Modi\u2019s U.S. state visit, cooperation on technology emerged as a prominent outcome. What is the current… Continue reading The concerns about India-U.S. digital trade<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,239,238,10498],"class_list":["post-249925","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-international-relations","tag-ir","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/249925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=249925"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/249925\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=249925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=249925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=249925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}