INDIA-USA TECHNOLOGY TRADE

INDIA-USA TECHNOLOGY TRADE

WHY IN NEWS ?

• Recently, Washington D.C.­ headquartered Computer & Communications Industry Association (CCIA), with members like Amazon, Google, Meta, Intel, and Yahoo, flagged 20 policy barriers to trading with India in a note titled “Key threats to digital trade 2023”.

CURRENT STATUS OF INDO-US TECHNOLOGY TRADE:

• In FY2023, the U.S. emerged as India’s biggest overall trading partner with a 7.65% increase in bilateral trade to $128.55 billion in 2022-­23.
• However, digital or technology services did not emerge as one of the sectors at the forefront of bilateral trade.
• The CCIA points out in its report that “despite the strength of the U.S. digital services export sector and enormous growth potential of the online services market in India, the U.S. ran a $27 billion deficit in trade in digital services with India in 2020”.

• In the recent past, however, the two countries have been ramping up their tech partnership through moves like the Initiative on Critical and Emerging Technology (iCET).
• Additionally, under the iCET, India and the U.S. also established a Strategic Trade Dialogue with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.

CONCERNS OF USA’S TECHNOLOGY FIRMS:

• The CCIA, while appreciating the efforts to ramp up trade through bilateral initiatives, has flagged in its note, the “significant imbalance” and “misalignment” in the U.S.­India economic relationship.
• “The U.S.’s extension of market access, trade and openness to Indian companies to operate and succeed in the U.S. has not been reciprocated by the Indian side.
• It has also expressed discontent over India’s veering away from “longstanding democratic norms and values, and seeking greater government censorship and control over political speech”.
• One of the taxation tools that U.S. tech firms have long taken exception to is the expanded version of the “equalisation levy” that India charges on digital services.

ISSUES WITH INDIA’S IT RULES, 2021:

• The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, has been flagged by the consortium of foreign tech firms under the some of the most “problematic policies”.

• The IT Rules place compliance burden on social media intermediaries (SMIs) and platforms with five million registered users or more, which means several U.S. firms end up falling under the ambit.
• Some other concerns raised are as :
• The “impractical compliance deadlines and content take­down” protocols, as the IT Rules require intermediaries to take down content within 24 hours upon receiving a government or court order.
• The platforms are also required to appoint a local compliance officer.
• There is also major criticism against the government’s institution of the three ­member Grievance Appellate Committees (GAC), which will hear user complaints about the decisions of SMIs regarding their content­ related issues and have the power to reverse those decisions.

ABOUT NEW DRAFT DATA PROTECTION LAW:

• The firms appreciate a “notable improvement” in the government’s new draft of the Digital Personal Data Protection Bill released in November 2022.
• But concerns regarding ambiguities about cross­ border data flows, compliance timelines, and data localisation still remain.
• The new draft has only one line about cross­border data flows as Section 17 of the Act says that cross­border flow of data will only be allowed for a list of countries notified by the Centre.

OTHER POLICY BARRIERS:

• The current draft of the Bill puts both Telecom Service Providers (TSPs) and Over ­the ­top (OTT) communication services under the definition of “telecommunication services”.
• The industry body contends that the law would “impose a first of the kind global authorisation/licensing requirement for any digital firm”.
• The CCIA contends in its note that the proposed law if passed in its current form, would subject a number of platforms to:
• Onerous obligations including licensing requirements
• Government access to data
• Encryption requirements
• Internet shutdowns
• Seizure of infrastructure and possibly monetary obligations for the sector”.

WAY FORWARD:

• According to CCIA, instead of “opaque” new rules , the law could be strengthened by “proactively supporting cross­border data flows through certifications, standard contractual clauses and binding corporate rules”.
• Parliamentary Committee on Finance’s demand in order to address anti­ competitive practices by big tech companies, proposed the adoption of a “Digital Competition Act” should be realised.

SYLLABUS: MAINS, GS-3, INDIAN ECONOMY

SOURCE: THE HINDU