TEXT & CONTEXT: THE CONCERNS ABOUT INDIA-U.S. DIGITAL TRADE
While cooperation on technology emerged as a prominent talking point in PM's state visit to the U.S., American tech companies have raised concerns about the same.
TEXT & CONTEXT: THE CONCERNS ABOUT INDIA-U.S. DIGITAL TRADE
While cooperation on technology emerged as a prominent talking point in PM's state visit to the U.S., American tech companies have raised concerns about the same.
Earlier this year, the Computer & Communications Industry Association (CCIA), with members like Amazon, Google, Meta, Intel and Yahoo, flagged policy "barriers" to trading with India.
Notably, in FY23, the U.S emerged as India's biggest overall trading partner. However, digital or technology services did not emerge as one of the sectors at the forefront of the bilateral trade. The two countries have ramped up their tech partnership with initiatives like the ICET. Additionally, under it a Strategic Trade Dialogue with a focus on addressing regulatory barriers and aligning export controls for smoother trade was also established.
CONCERNS REGARDING TAXATION TOOLS?
The CCIA has raised issues of imbalance in the partnership, with allegations of discriminatory policies that favor Indian players. U.S. tech firms have long taken exception to the "equalization levy" that India charges on digital services.
India in 2016, with a goal of "equalizing the playing field" between resident service suppliers and non-resident digital suppliers imposed a unilateral measure to levy a 6% tax on specific services received or receivable by a non-resident not having a permanent establishment in India, from a resident who carries out business.
In 2020, India came up with "Equalization Levy 2.0" which imposes 2% tax on gross revenues received by a non-resident e-commerce operator from the provision of 'e-commerce supply or service' to Indian residents or non-resident companies having a permanent establishment in India.
About IT Rules 2021?
The rules place compliance burden on social media intermediaries and platforms with 5 million registered users or more, which means several U.S firms end up falling under the ambit.
The rules require intermediaries to take down content within 24 hours upon receiving a government or court order. They also require platforms to appoint a local grievance officer. Plus, SMIs are now obligated to remove, within 72 hours, information or communication link in relation to six stipulated prohibited categories of content as and when complaint arises.
There has also been criticism against the three-member Grievance Appellate Committee that will hear user complaints about SMIs' actions regarding user complaints.
Apart from these concerns, tech firms are also worried about Indian government's stand on data localization. Section 16 of the new draft of the Digital Personal Data Protection Bill says that cross-border flow of data will only be allowed for a list of countries notified by the Centre.
The CCIA contends that the draft Telecommunications bill, 2022 would redefine "Telecommunication services" to include both Telecom services and OTT services. This would put a range internet-enabled services in the same ambit of telephony and broadband services. India, with more than 759 million active internet users representing more than 50% of its population is a gold mine for data. The country is planning to become a hub for data processing, and cloud services. Hence, India's policies on data flow and digital services will have impact on a global level.