India has deployed multiple tools to champion their protectionist industrial policy and to tilt the playing field in favour of domestic players, the CCIA said
The CCIA report claims that India is vying for greater government censorship, which has made it extremely challenging for US-based companies to operate in the country
Despite the regulatory challenges, India continues to remain an attractive bet for digital companies, with the homegrown digital economy expected to soar to $1 Tn by 2025
A top Washington-based digital advocacy group, Computer & Communications Industry Association (CCIA), believes that the recent IT amendments and the proposed telecom bill envisaged by India pose major policy barriers to digital trade between the two countries.
In a report titled ‘Key Threats To Digital Trade 2023’, which was released in February this year, the non-profit advocacy group pointed out 20 pieces of existing and upcoming legislation, including the Content Moderation Act and the equalisation levy (introduced in Budget 2020), as its bone of contention.
The CCIA counts all major American digital giants such as Google, Meta, Amazon and Uber as its members.
Training its guns on the Indian government, CCIA said that the country’s Atmanirbhar Bharat push had intensified its ‘patently protectionist posture’ towards US digital companies.
“The Indian government has deployed a variety of tools to champion their protectionist industrial policy and to tilt the playing field in favour of domestic players. These include the adoption of discriminatory regulation and policies,… restrictions on cross-border data flows, and competition policy and rulings as a smokescreen for protectionist industrial policy and import substitution,” the CCIA said.
The report further claims that India was vying for greater government censorship and control over political speech, which has made it ‘extremely challenging’ for US-based companies to operate in the country. It added that local authorities were deploying state institutions to pressure foreign companies to comply with norms.
Noting that 20 trade barriers have already been promulgated into laws, it drew the attention of stakeholders towards 13 other key policy frameworks, related to the supposed trade barriers, that were cruelty under the works. Among the key trade barriers flagged by CCIA were:
- Government-imposed restrictions on internet content
- Draft Indian Telecommunication Bill
- Taxation of digital services
- Restrictions on cross-border data flow
- Restrictions on cloud services
- Discriminatory platform regulation
A big chunk of the report panned the recently unveiled IT amendments and the proposed telecom bill. According to the lobby group, the new IT rules mandate additional compliance requirements on intermediaries such as strict timelines for takedown requests and significant penalties for noncompliance.
On the draft telecommunication bill, the digital advocacy group said that the draft norms subject the newly defined telecom service providers to a slew of obligations such as a licensing regime, data access and encryption requirements. This, as per the CCIA, would undermine digital security and freedom of expression in the country.
It also flagged certain aspects related to the Digital Personal Data Protection Bill, 2022, saying that several provisions in the draft legislation lacked clarity and sought the removal of ‘redundant and superfluous requirements’ for data fiduciaries and data processors.
Elaborating its stance on the Parliamentary Standing Committee on Finance’s recommendations seeking a digital competition law, the CCIA said that the rules ‘appear to be largely targeted’ at US-based tech companies.
The advocacy group also slammed the Competition Commission of India’s (CCI’s) flurry of antitrust fines and orders against Google, saying that the move (fines related to Google Play Store) could lead to a fragmented, more expensive and less sustainable market for apps.
“They (CCI’s antitrust rulings) point to a pattern of concerning behaviour on the part of the Government of India, seeking to use antitrust laws as a smokescreen for protectionist industrial policy,” the report said.
In the past, other lobby firms, representing the interest of US-based big tech giants, have publicly sparred with the Indian government. Be it the DPDP bill or the IT amendments, industry bodies such as Asia Internet Coalition (AIC) and the US-India Business Council (USIBC) have lashed out at many such digital reforms.