October 22, 2019, 4:19


After Counter-Tariffs, India Braces for Tough Time Ahead During Pompeo’s Visit

After Counter-Tariffs, India Braces for Tough Time Ahead During Pompeo’s Visit

The Indian government expects some kind of demand for concessions on data localisation and e-commerce from the US. Washington has termed India’s draft national e-commerce policy, such as data localisation requirements and restrictions on cross-border data flows, as “discriminatory in nature”.

New Delhi (Sputnik): India has started internal discussions with stakeholders, anticipating a tougher stance by the US administration during US Secretary of State Mike Pompeo’s India visit later this month.

On Monday, India’s Minister of Commerce Piyush Goyal, in a meeting with stakeholders of e-commerce and data localisation, held discussions on issues like “strengths and weaknesses of Indian companies who may benefit from e-commerce”.

“Threats from large foreign competition, level playing field and impact of anti-competitive practices such as predatory pricing and other discriminatory practices came up for discussion”, an official communique later revealed.

The meeting also deliberated upon gains and costs of cross border flows of data, ownership and sharing of data, as well as efficiency gains and losses on utilising Indian data servers, emails, and clouds with e-Commerce companies.

The discussion is being held a week ahead of Pompeo’s visit to India for talks with his Indian counterpart Subrahmanyam Jaishankar, followed by meetings between US President Donald Trump and Indian Prime Minister Narendra Modi at the G-20 summit on 28-29 June in Osaka, Japan.

The US has been criticising India’s data localisation and e-commerce policy for long, saying that the country’s draft national e-commerce policy, such as data localisation requirements and restrictions on cross-border data flows, are “discriminatory in nature”.

“The US strongly encourages India to reconsider the most discriminatory and trade-distortive aspects of this draft policy and the other measures described above”, the US Trade Representative’s 2019 National Trade Estimate Report on Foreign Trade Barriers said.

The Indian government expects some kind of demand for concessions on data localisation and e-commerce by the US in the upcoming meeting between the leaders.

India’s draft e-commerce policy has prohibited e-commerce firms from selling the products of companies in which they have stakes. The proposal also denied permission to the e-commerce companies from entering into an agreement with brands for the exclusive sale of products.

On 15 June, India announced the imposition of retaliatory tariffs on 28 US products. The decision comes amid Pompeo’s recent speech at the US-India Business Council in Washington, DC. In his speech, he notably said, “We will probably discuss the recent decision on the GSP (the Generalised System of Preferences) programme. I do hope, and remain open — and we remain open to dialogue, and hope that our friends in India will drop their trade barriers and trust in the competitiveness of their own companies, their own businesses, their own people, and private sector companies”.

“I would argue middle-of-the-road solutions will eventually prevail. For instance, India has offered to reduce duty on imported high-end phones, instead of the US’ demand to revoke the 20 percent duty on all phones. This approach could singularly benefit the US’ export of high-end phones (like Apple iPhones), whereas cutting duty across the board could even benefit cheaper Chinese phones penetrating the Indian market”, Kashish Parpiani, a research fellow at the Observer Research Foundation’s Mumbai Centre responded to a question of whether retaliatory tariffs on US products will eventually escalate into a trade war between the two countries.

Nevertheless, as trade issues between Washington and New Delhi have been niggling for more than two years, the Indian government is expecting pressure from the US to sign a trade pact that would bring down tariffs on US imports.

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