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Exclusive: U.S. voices concern as India's e-commerce restrictions hit Amazon, Walmart - sources

India Is Cracking Down on Ecommerce and Free Speech

Postby smix » Thu Feb 14, 2019 10:41 pm

India Is Cracking Down on Ecommerce and Free Speech
Wired

URL: https://www.wired.com/story/india-is-cr ... ee-speech/
Category: Politics
Published: February 14, 2019

Description: When it comes to cracking down on tech giants, India is on a roll. The country was the first to reject Facebook’s contentious plan to offer free internet access to parts of the developing world in 2016. Since December, Indian policymakers have taken a page from China’s playbook, enacting sweeping restrictions in an attempt to curtail the power of ecommerce behemoths like Amazon, and pushing proposals that would require internet companies to censor “unlawful” content, break user encryption, and forbid Indian data from being stored on foreign soil. In the past week alone, Indian officials have demanded that Twitter CEO Jack Dorsey come before Parliament to answer accusations of bias, called for a ban on TikTok, and opened an investigation into claims that Google abused its Android mobile operating system to unfairly promote its own services. For all its good intentions, India’s tech backlash could backfire, with potentially dire consequences for all tech companies—big and small—operating in India, not to mention free speech online. “There is an element of nationalism which is creeping into tech policy in India,” said Apar Gupta, executive director of the Internet Freedom Foundation, a digital-rights group. Gupta says this has resulted in a number of India-First-style tech policies being rushed through the government using the much quicker executive notification process rather than seeking parliamentary approval, which could have resulted in laws that would be more comprehensive and enforceable. Calling for the regulation of tech giants is easy, but actually developing reasonable, scalable policies with a feasible strategy for deployment is more difficult. In the case of India, Gupta added, “it wants to do a lot, but it all seems a bit clumsy.” Thursday marks the end of the counter-comment period for new proposed rules that could have a chilling effect on free expression and privacy online. The proposed changes would drastically weaken protections for internet “intermediaries” by amending Section 79 of the IT Act—the Indian equivalent of Section 230 of the Communications Decency Act in the US—effectively forcing platforms to censor user content deemed “unlawful” by the government, or be held liable for the postings. The rules would also require messaging services like WhatsApp to build a backdoor for Indian authorities, weakening end-to-end encryption. Prime minister Narendra Modi’s government could put the rules in effect as soon as Friday, as the change doesn’t require parliamentary approval. The proposed rules were ostensibly created to check the power of tech giants, but they could end up helping the Facebooks, Twitters, and Googles of the world by holding newer, less-well-heeled rivals to the same strict censorship and filtering requirements. “It may have the unintended consequence of in fact benefiting [the tech giants],” says Gupta, “because only they would have the ability to actually comply with [these rules] to any feasible extent.” On February 1, new rules aimed at limiting the influence of ecommerce giants such as Amazon and Walmart took effect. The new regulations ban many of the strategies that have contributed to Amazon’s dominance in the US and Europe, such as: promoting and selling your own products (or the products of a company you control), pushing other companies to sell products exclusively through your marketplace, giving certain sellers preferential treatment or placement, and abusing your market power to undercut your competitors by offering hard-to-beat discounts. Initially, Amazon was forced to pull thousands of products from its digital shelves because they came from Amazon brands or from companies in which it had a large stake. For example, Amazon owned a 49 percent stake in Cloudtail India, the site’s biggest vendor, and in Appario Retail, another extremely popular seller for Amazon users in India. Both were prohibited under the new ecommerce rules. However, less than a week later, Cloudtail was back on Amazon, with over 300,000 products listed for sale. The rules defined company-controlled vendors as sellers in which the marketplace owns at least a 25 percent stake, so Amazon cut its indirect holding of Cloudtail to 24 percent, according to Reuters. An early supporter of the ecommerce restrictions, the Confederation of All India Traders called Amazon’s move an attempt to circumvent the rules. Amazon appears to have used a similar strategy to get its Prime Pantry services back online and is reportedly now selling its own grocery products via an affiliate. On Thursday, Amazon slashed its commission fees for certain high-performing sellers in an attempt to boost the visibility of independent vendors on the platform. “It's a cat-and-mouse game to address harms such as anti-competitive effects and price gouging by using executive notifications rather than regulatory institutions such as a competition regulator,” says Gupta. He says tech giants like Amazon have a lengthy history of finding and exploiting loopholes in even the most stringent regulations, while smaller companies can feel the brunt of the rules. “Unless you specifically look at who is actually indulging in anti-competitive practices [and] levy a very tough penalty on them—which can only happen through institutional enforcement—these kinds of issues will linger,” he added.
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Amazon, Flipkart among firms facing trouble amid draft data localisation law, new e-commerce rules

Postby smix » Thu Feb 14, 2019 10:53 pm

Amazon, Flipkart among firms facing trouble amid draft data localisation law, new e-commerce rules
Financial Express

URL: https://www.financialexpress.com/econom ... s/1487114/
Category: Politics
Published: February 14, 2019

Description:: This has disrupted product listings on Amazon's India website and compelled it to change its business structures.
Draft law on data localisation and the new e-commerce rules have garnered severe attention in the recent policy debates. Expressing his concerns on the same, Thomas Vajda, a visiting US diplomat, pointed out that they do not take into account the needs of all stakeholders such as American and other foreign companies. “It is in India’s interest when it undertakes these new policies to reach out to all stakeholders and think very carefully about the impact on the overall business environment,” he said. The new changes are also being refuted by various global firms operating in India who regard it as against the spirit of globalisation and technology revolution. Moreover, many startups and companies dealing with personal data would have to bear an additional cost to comply with these norms. Against this background, a careful analysis of these issues becomes a must.
Data Localisation
The idea of ‘data localisation’ was mooted by the Ministry of Electronics & Information Technology (MeitY) in the draft on Information Technology Intermediaries Guidelines (Amendment) Rules, 2018, based on the recommendation of a B N Srikrishna committee. Under it, all personal data of Indians should have at least one copy in India and a subset of that data, labelled as critical personal data, must be stored and processed only in India. The move would force various big companies such as Mastercard and Visa to move their data to India. While some domestic players such as Mukesh Ambani, the chairman of Reliance Industries, have supported the idea citing privacy and security concerns, few experts have also opposed it. For instance, in a working paper of NIPF, Rishab Bailey and Smriti Parsheera, concluded that the costs of introducing broad and sweeping data localisation norms are likely to outweigh its benefits, from a rights-based perspective as well as an economic one.
New E-commerce Policy
The new rules for the e-commerce sector announced by the government in December, has banned companies such as Amazon and Flipkart from striking exclusive deals with sellers, restricted their ability to offer discounts and barred them from selling products via vendors in which they have an equity interest. This has disrupted product listings on Amazon’s India website and compelled it to change its business structures. Flipkart had also expressed its discontent with the revised FDI e-commerce rules, said an earlier report by PTI. With the general election around the corner, the new changes are being regarded as an attempt by Modi government to placate small traders, who had for earlier complained about the business practices of large e-commerce companies.
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The US and India are heading for a showdown on trade

Postby smix » Fri Feb 15, 2019 4:16 pm

The US and India are heading for a showdown on trade
CNN

URL: https://www.cnn.com/2019/02/13/economy/ ... index.html
Category: Business
Published: February 13, 2019

Description: New Delhi (CNN Business) - The United States is trying to negotiate an end to its trade war with China, but tensions with another big economy are rising. US Secretary of Commerce Wilbur Ross was due to visit India for talks on Thursday as storm clouds gather over a trading relationship worth about $125 billion a year. He canceled his trip late Wednesday. "Due to inclement weather, technical problems that led to the cancellation of his flight, and other logistical issues, Secretary Ross regrets he is no longer able to attend ... in person," a Commerce Department spokesperson said. "He intends to participate in most of the sessions remotely and thanks our private sector and the government of India hosts for their continued partnership as we further strengthen the ties between our two countries." Tensions between New Delhi and Washington have increased in recent months as President Donald Trump's "Buy American, Hire American" strategy clashes with Indian Prime Minister Narendra Modi's campaign to "Make in India."
Harleys and whiskey
Trump has repeatedly slammed Indian duties on US goods, particularly on products like Harley-Davidson (HOG) motorcycles, even though it's not clear Harley actually pays the tariff. Last month, Trump took aim at India's 150% tariff on imported whiskey. "India is a very high tariff. They charge us a lot of tariffs," he said at a White House event. The US administration may now be preparing to tighten the screws. Officials are considering removing India from a program that allows it to export goods such as jewelry, vehicle parts and electric motors worth $5.6 billion free of US tariffs, according to Reuters. The Generalized System of Preferences (GSP) program gives 121 developing countries easier access to US consumers. India was the biggest beneficiary in 2017, according to US government data. Washington announced last year that it would review India's eligibility for the GSP program, after complaints from US dairy farmers and medical device manufacturers that India's tariffs had hurt their exports.
$20 billion deficit
One of Trump's goals has been to cut America's trade deficit. India exported goods worth more than $50 billion to the United States last year and imported US products worth about $30 billion, according to the US Census Bureau. Modi, on the other hand, wants to attract more foreign manufacturers into India. Anything that makes it harder to access the US market could scare them away just as Modi begins campaigning for a second term. "The removal of trade concessions to the US could have further implications such as reducing the attractiveness of India as a manufacturing hub," said Jason Yek, country risk analyst at research firm Fitch Solutions. "This could weigh on the inflow of foreign direct investment over the coming years." The United States Trade Representative declined to comment on India's potential removal from the GSP, and India's Ministry of Commerce did not respond to requests for comment. "I think partly it could be construed as negotiation strategy, you raise the pitch in the run-up to the actual talks," said Rajat Kathuria, director of the Indian Council for Research on International Economic Relations, a think tank. But the US administration may have a point, he added, given India is now the world's fastest growing major economy. "We've grown out of the developing country threshold that provided us conditional access to that system," he said. "We may be able to get it one more time, or a couple more times, but I think the writing is on the wall," Kathuria said. The GSP isn't the only source of tension. India was one of several countries hit by US steel and aluminum tariffs last year. India announced its own tariffs on US goods worth $240 million in retaliation but has yet to impose them.
Amazon and Walmart feel the pain
Restrictions on two of America's biggest companies could serve as another major sticking point in trade talks. New Delhi introduced regulations this month with the aim of preventing global retailers such as Amazon (AMZN) and Walmart (WMT) from using their deep pockets and massive scale to drive down prices in India. Amazon has pledged to invest more than $5 billion in its India business, while Walmart paid $16 billion last year for Flipkart, India's biggest online retailer. Both companies have pushed back against the new rules, but their requests for more time to comply were rejected by the Indian government under pressure from local business owners. The US government has reportedly been lobbying the Indian government to relax the e-commerce rules and protect Walmart and Amazon's investments. Groups that promote US-India business links have hit out against the e-commerce restrictions. The US-India Strategic Partnership Forum called them "regressive," while the US-India Business Council warned of the "harmful implications" of the new policies. Other restrictions on digital payments have hit companies such as Mastercard (MA), whose CEO Ajay Banga was due to accompany Ross to New Delhi. And government plans to require companies like Facebook (FB) and Google (GOOGL) to store data of Indian users in the country have also prompted a similar backlash from US companies and trade bodies.
Finding a solution
While tensions continue to mount between Delhi and Washington, the United States may be reluctant to spark another trade war after months of friction — and tariffs worth billions of dollars — on China. "I don't think they're going to escalate the situation to the point that they have done with China," said Kathuria. "India has to be a collaborator and partner with the United States." And the US-China trade war gives India an extra incentive to avoid a fight. "If there's going to be a spillover from China to other markets to access the US market, then India is well placed to exploit whatever slack there is because of the trade war," Kathuria said.
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India Should Call Truce in U.S. Trade Conflict

Postby smix » Fri Feb 15, 2019 8:57 pm

India Should Call Truce in U.S. Trade Conflict
Bloomberg News

URL: https://www.bloomberg.com/amp/opinion/a ... rt-sighted
Category: Politics
Published: February 13, 2019

Description: Growing protectionism is going to undermine an export sector that’s already struggling.
U.S. and Indian officials are meeting in New Delhi today for what promises to be a tetchy summit. The trade relationship between their countries has never been easy. The fact that India has a $22-billion trade surplus with the U.S. — despite running a deficit with many of its other major trading partners — is particularly annoying to the Trump administration. The total might seem insignificant compared to America’s $566 billion trade deficit with China. For its own sake, though, India would be wise to address rather than try to minimize U.S. complaints. That’s not only because the U.S. seems to be preparing heavy-duty retaliation. It might remove Indian exports from the “General System of Preferences” tariff plan, which ensures that about 2,000 different kinds of goods — “product lines,” as the trade negotiators call them — can be imported into the U.S. without any tariffs being levied. Washington seems serious: In November, 50 Indian product lines were removed from the GSP. Normally, Indian negotiators would point out that Indo-U.S. trade isn’t particularly unbalanced, that we’re still a developing country and should get a few concessions, and that we’re all in this together against China, aren’t we? That argument rings increasingly hollow, however. It isn’t just Trump’s fixation on Harley-Davidson motorcycles: He famously complained that Harleys imported into India were subject to a 50 percent tariff, even after Indian Prime Minister Narendra Modi called the U.S. president personally to tell him tariffs were being cut. “They think they’re doing us a favor,” Trump fumed. “That’s not a favor.” More genuine is concern about India’s growing protectionism. Indian tariffs on solar panels (ironically, meant to control Chinese imports) prompted a U.S. complaint at the World Trade Organization. Then, an Indian attempt to fix the price of stents caused the U.S. medical equipment industry to rise up in protest. Now, India has chosen to wage battle against U.S. companies on a completely new front: data localization. The Reserve Bank of India told all payments companies to “store the entire data related to payments systems” solely in India. The government followed up with two separate draft policies, one of which ordered e-commerce companies to store user data in India and one which tells all internet companies to store personal data of Indians in India. The latter policy doesn’t even pretend to be anything other than an attempt to make it easier for Indian companies to do business at the expense of foreign ones. And, incidentally, it’s terrible news for any Indian who doesn’t want all her data made available to an unaccountable and intrusive national security bureaucracy. E-commerce has also been a major flashpoint. The government is going after foreign-owned e-commerce web sites such as Amazon, telling them that they can’t hold any inventory or allow their platform to be used by companies they’d invested in. In other words, Amazon needs to find a middleman to sell Kindles or Echos on its Indian website. Local companies face no such restrictions. The U.S. can certainly be faulted for not seeing the bigger picture. It’s China that’s distorting the global playing field, and U.S. trade policy should be focused on finding and building alliances with countries such as India to combat that larger problem. India has the potential to be a giant market, which U.S. companies might need if they’re slowly squeezed out of China. But, India’s negotiators, too, should recognize two basic facts. First: The world isn’t going to take its rising protectionism lying down. If the country starts closing off its market, which right now remains more potential than reality, it will find doors closing to its exports as well. That in turn would reduce its attractiveness as a manufacturing base. This leads us to the second fact, which is that India can’t manage without preferential trade deals. A quarter of the GSP goes to benefiting India, about $5.6 billion. This allows a lot of smaller, labor-intensive — and otherwise uncompetitive — Indian exporters access to the vast and lucrative U.S. market. Not only can’t India afford to lose that, we need more such deals. Indian exports have largely remained flat, or even declined in real terms, since Modi took office. They were $314 billion in 2013-14 and are about $300 billion now. Protecting big business in India needs to take a back seat to the very real crisis facing Indian exports.
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India is considering new e-commerce rules that may restrict Amazon and Walmart

Postby smix » Mon Feb 25, 2019 10:24 am

India is considering new e-commerce rules that may restrict Amazon and Walmart
CNBC

URL: https://www.cnbc.com/2019/02/25/indias- ... lmart.html
Category: Politics
Published: February 25, 2019

Description: India has outlined a new draft policy to govern its growing e-commerce sector that would protect domestic firms and may further restrict the way foreign companies operate within the country. New Delhi appears to be trying to follow China's playbook in successfully nurturing the likes of Baidu, Alibaba and Tencent to become global tech giants. Beijing has many restrictions on how foreign tech companies can operate in the world's second-largest economy. The draft, published Saturday, calls for data to be stored locally and for setting up more data centers and server farms within the country. It would not only give a boost to computing in India but would lead to local job creation, policymakers argued in the document. Foreign companies would have three years to prepare or build the infrastructure they need to comply with the regulation, which could add to their cost of operations. "India's data should be used for the country's development," the draft said. "Indian citizens and companies should get the economic benefits from the monetization of data." Foreign e-commerce firms would also have to become registered business entities in India to continue selling in the country, according to the draft rules. The 41-page document also addressed issues such as the sale of counterfeit goods and the protection of consumers. Companies have been invited to provide comments on the draft policy by Mar. 9. While e-commerce in India is still at its nascent stage, compared to the overall retail sector, the market is predicted to reach $200 billion by 2026 from under $39 billion in 2017, mostly due to rising incomes and a surge in Internet users, according to the government's India Brand Equity Foundation. The untapped potential of India's e-commerce market has led to a roughly $5 billion investment from Amazon and a $16 billion bet from Walmart into local player Flipkart. But in December, India put new restrictions on foreign direct investments into the e-commerce sector, forcing Amazon and Walmart-owned Flipkart to restructure their business operations to comply with the law. "We are currently studying the draft policy and we will provide our inputs during the public review period," an Amazon India spokesperson told CNBC on Monday. Flipkart did not immediately respond to an emailed request for comments. As millions of Indians access the internet for the first time, most of them through smartphones, the country has become a target for global tech companies to acquire new users for their services and to gather demographic data on online behavior and spending habits. Policymakers said in the draft that without having access to that massive trove of data generated within India, local businesses would not be able to create value-added digital products. Domestic technology companies, they said, would be "merely processing outsourced data work." Only a handful of companies today dominate the digital economy by exploiting first mover's advantage in a data-driven society, they said. "By not imposing restrictions on cross-border data flow, India would itself be shutting the doors for creation of high-value digital products in the country," the draft said. India's richest man Mukesh Ambani, who is also the chairman and managing director of local conglomerate Reliance Industries, has been a vocal proponent of storing data locally, as opposed to placing them in the hands of foreigners. The draft outlined plans for a legal and technological framework that would provide the basis for restricting cross-border flow of data generated within the country. It would allow Indian authorities to request access to that data even if it is stored abroad. New Delhi can also potentially deny another government access to that same information. Ahead of this year's crucial parliamentary elections, India is stepping up its restrictions on the way global tech titans, including Facebook, are operating in the country. Last month, the secretary of India's Telecommunications Department told local start-ups in a closed-door meeting the government will introduce a so-called "national champion" policy soon to promote the success of domestic companies, the Wall Street Journal reported.
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Modi government wants exclusive access to Flipkart, Amazon data

Postby smix » Mon Feb 25, 2019 6:24 pm

Modi government wants exclusive access to Flipkart, Amazon data
Quartz

URL: https://qz.com/india/1558195/modi-gover ... azon-data/
Category: Politics
Published: February 25, 2019

Description: Indian online shoppers’ data is a “national asset” and a “mine of natural resource,” which the Indian government wants exclusive rights to. On Feb. 23, the Narendra Modi government released its draft e-commerce policy which, among other things, suggests barring retailers in the country from allowing data access to foreign business entities, even if they have the consent of the user. The 41-page document, which goes as far as comparing data to a coal mine, says:
India and its citizens have a sovereign right to their data. This right cannot be extended to non-Indians (the same way that non-Indians do not have any prima facie right or claim to, say, an Indian coal mine). This understanding flows from the acknowledgement that data about an Indian is his/her own. Even after anonymisation, the interests of the individual cannot be completely separated from the derivatives that may be obtained by analysing and drawing inferences from a certain set of data.

However, Indian authorities will have immediate and unconditional access to user data generated in the country, it states. Currently, data gathered by e-commerce companies in the country is stored on the private cloud storage capacities of American companies such as Microsoft and Amazon. These servers are typically hosted outside India in countries that have cheaper and better storage infrastructure. The government has sought feedback on the draft policy from the public by March 09.
The deal about data
The draft policy says “citizens have a sovereign right to their data” and, therefore, all data generated by e-commerce websites must be stored in India. However, much to the relief of e-tailers, it states if this draft policy is implemented, all companies will be given three years to fully comply. Some other important points that the draft policy makes about data include:
* The government is putting in place a legal framework to deal with violations in data collection, usage, and storage.
* The government has suggested a “data authority” to track data collected by internet of things (IoT) devices in public spaces such as traffic lights, by e-commerce platforms, social media, and search engines.
* The draft policy foresees leveraging the available data to the benefit of micro, small, and medium enterprises (MSMEs) and startups.
“Without access to adequate data, MSMEs and startups remain at a disadvantage to develop a large number of innovative solutions,” the document states. “There have been arguments that data held by large corporations must be made available to other companies, through some sort of ‘compulsory licensing.’” There are a few caveats to this. The draft policy exempts certain kinds of data from these restrictions, including data not collected in India, business-to-business (B2B) data shared between companies under a commercial contract, and data flowing through software and cloud computing services.
The Chinese wall
The draft policy comes just a couple of months after the government updated its FDI policy for e-commerce companies. The FDI policy made some damaging changes that forced the likes of Amazon and Walmart-owned Flipkart to make structural changes. The new draft policy comes down heavily on unauthorised e-commerce websites, especially Chinese firms such as Shein and Club Factory, misusing the “gifting” route to avoid customs duty and goods and services tax (GST). It suggests several operational changes to such portals, including mandatory compliance with GST and routing the parcels through regular customs. To check the misuse of the gifting route, the draft policy has also suggested some changes for registered e-commerce players in the country. It proposes that all e-commerce websites be mandated to route all their shipments from other countries to India through the customs route. It has suggested that an integrated system is created, connecting India’s central bank (the Reserve Bank of India) and India Post, to better track imports. Indian customs regulations currently give tax exemption on gifts sent to relatives from Indians living abroad. ”In view of the misuse of the ‘gifting’ route, as an interim measure, all such parcels shall be banned, with the exception of life-saving drugs,” the draft states. As an additional safeguard, all payments from Indian banks and payment gateways “made to unauthorised and unregistered (GST non-compliant) sites/apps shall be barred.” In addition, the draft policy makes it mandatory for any e-commerce website that wants to do business in India to have a registered business entity in the country as the importer on record or as the firm through which all sales in India are transacted. “Any non-compliant e-commerce app or website will not be given access to operate in India,” it states. Under current norms, consumers can shop directly from foreign websites irrespective of whether they are registered in India or not. Tightening the noose around Chinese e-commerce websites, the government said a body of industry stakeholders will be created that will identify “rogue websites” under the “infringing websites list.” A rogue website would refer to those that host predominantly pirated content. The draft policy also suggests:
* Internet service providers will have to mandatorily remove or disable access to portals listed in the infringing websites list.
* Rogue websites earn their revenues through online payments made based on a subscription or advertisement revenue models. Such payments have to be routed through payment gateways, which shall not permit flow of payments to or from such rogue websites.
* Search engines must take necessary steps to remove websites identified in the list from search results.
* Advertisers or advertising agencies shall not host any content on the websites identified in the list.
Empowering shoppers
The draft policy has also sought to streamline the grievance redressal mechanism in e-commerce firms, especially in the case of counterfeit products. The final policy may also make marketplaces directly liable to return the amount paid by the customer in case of a consumer complaint regarding a counterfeit product. Additionally, the draft policy seeks to mandate the following if a seller is caught selling a faulty product:
* The marketplaces shall cease to host the counterfeited product on their platform, thereby taking down every information related to the product.
* It will be mandatory for all e-commerce websites and apps to display phone numbers and email addresses for consumer grievance redressal.
* A system of acknowledgment of consumer complaints must be put in place and there should be clear timelines for their disposal. These timelines are to be displayed prominently on the website or the app.
* The first resolution to all consumer complaints must be provided within a week.
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India decides to opt-out of WTO e-commerce talks over digital tax concerns: Report

Postby smix » Mon Feb 25, 2019 6:39 pm

India decides to opt-out of WTO e-commerce talks over digital tax concerns: Report
Business Insider

URL: https://www.businessinsider.in/india-ag ... 148424.cms
Category: Politics
Published: February 25, 2019

Description: India won’t be participating in the World Trade Organization (WTO) talks on e-commerce next month because of concerns over unfair market access to foreign players. India also just came out with its own draft of the e-commerce policy on Saturday, but its main concern with WTO is the proposed custom duties on electronic transmissions. A commerce department official told Business Standard, “WTO rules come into effect for all 164 members and need to be ratified by each, but for the first time a major decision has been taken without complete consensus among member nations. We will not encourage a multilateral platform to run, based on the interests of a few nations. Our policy will deal with concerns such as cross-border data flow.” Most global e-commerce players haven’t been too subtle about the fact that India is a ‘strategic market’ for them. India claims the new rules put forth by the WTO could provide unfair market access to foreign companies, something they’ve been working hard to deter despite opening the Foreign Direct Investment (FDI) pipelines.
Tax on tax
The draft e-commerce policy that the Indian government put out on Saturday favours not imposing any customs duties on electronic transmissions — basically any type of digital trade — which is in contradiction to the WTO’s e-commerce policy.
“With increasing digitisation, more and more products such as books, music, films, video games, etc. are being traded electronically. By agreeing to the permanent moratorium, countries with tariff schedules, which allow putting duties on these kinds of products, will give up these rights and lose revenues.” - India’s draft e-commerce policy

Even developed nations like the US have called for “non-discrimination in treatment of digital products” since it is “at the core of the digital trading system.” Other developed nations likes the Singapore and South Korea are also propagating that custom duties should not be imposed on the transaction of digital products. On the other hand, China is in favour of the deal, according to officials. They told Business Standard that Alibaba, the Chinese multinational conglomerate, has partnered with the WTO and the World Economic Forum (WEF) to create an Electronic World Trade Platform (eWTP). While data is at the heart of India’s new e-commerce, it can help India’s cause at the WTO by strengthening the opposition.
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US President Donald Trump terminates preferential trade status for India

Postby smix » Sat Jun 01, 2019 5:11 pm

US President Donald Trump terminates preferential trade status for India
Deutsche Welle

URL: https://www.dw.com/en/us-president-dona ... a-48998911
Category: Politics
Published: June 1, 2019

Description: Washington accuses New Delhi of deploying a wide range of trade barriers that negatively affect US commerce. Media reports say that India could impose higher import duties on US goods in response to Trump's latest move. India will lose its trade privileges with the US as a beneficiary of the Generalized System of Preferences (GSP) next Wednesday, US President Donald Trump announced Friday. "I have determined that India has not assured the United States that it will provide equitable and reasonable access to its markets," Trump said. "Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019," the statement added. The GSP program was introduced more than 40 years ago, in 1976, to promote economic growth in developing countries, allowing the export of certain products from these nations to the US duty free. The Indian government dubbed Trump's move "unfortunate" but said that it will continue to seek to build strong economic ties with Washington. "India, like the US and other nations, shall always uphold its national interest in these matters," the government said in a statement on Saturday. New Delhi said that it viewed the issue as part of its ongoing economic relationship with the US and "will continue to build on our strong ties with the US, both economic and people-to-people." "We are confident that the two nations will continue to work together intensively for further growing these ties in a mutually beneficial manner," it added.
Scheduled since March
In a letter to leaders of the US Congress on March 4, the White House said that India and Turkey were set to lose their preferential trade treatment with the US. Last month, 24 members of the US Congress sent a letter to Trump, urging him not to end India's GSP status. Removing a country from the GSP requires 60 days' notice, and it appears that President Trump waited until after India's mammoth elections before completing the move. Indian media reports said New Delhi was considering higher import duties on more than 20 US goods, including agricultural produce and chemicals, in response.
Indian 'protectionism'
Washington's GSP program allows $5.6 billion (€4.94 billion) worth of Indian exports to enter the US duty free. An Indian official cited by Reuters in March said that the "actual benefit" from the program to the Indian economy was only $250 million per year. "GSP is more symbolic of the strategic relationship, not in value terms," the official said. US trade officials, however, accuse New Delhi of deploying "a wide array of trade barriers that create serious negative effects on US commerce." US authorities said their country's trade deficit with India reached $27.3 billion in 2017. In February, India started enforcing new rules on e-commerce in an attempt to shield domestic traders from foreign-based business giants. The rules caused severe disruption for Amazon and Flipkart, which is majority-owned by the US retail giant Walmart. Last year, New Delhi ordered Visa and Mastercard to store their data on transactions involving users in India solely on Indian servers. US firms have opposed such legislation in various parts of the world. India also increased tariffs on electronics and smartphones. Previously, the Trump administration imposed tariffs of 25% on steel and 10% on aluminum imported from India.
Oil imports and Iran conflict
New Delhi and Washington are also at odds over Iranian oil imports. In April, the US announced it would not extend sanction exemptions to countries importing oil from Iran when they expired in early May. It meant countries and companies trading with Iran without Washington's consent would risk US sanctions and getting cut off from the American financial system. India is one of the countries likely to be the hardest hit by the US decision. India is the world's third-biggest oil consumer, but its energy needs are primarily met through imports. The South Asian nation imports almost 80% of its oil requirements and Iran is its third-largest supplier, contributing over 11% of its crude oil demand. In the fiscal year 2018-19, India imported about 23.5 million tons of Iranian oil. Following the US decision, India may try to increase its supplies of oil from countries like Saudi Arabia and the United Arab Emirates. Indian refiners are increasing their planned purchases from the nations of the Organization of the Petroleum Exporting Countries (OPEC), Mexico and the United States, to hedge against the loss of Iranian oil. Official figures released on Friday showed that India's growth slowed for the third straight quarter, to 5.8% in January-March, while unemployment hit a 45-year high last year.
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