· Calling upon India to rethink trade barriers, tariffs and regulations in order to become a hub for innovation and production, U.S. Ambassador Kenneth Juster says that India and the U.S. need to see trade relations as an important strategic element of their ties.
· He made a particular mention of barriers for the technology industry, including a Reserve Bank order telling technology companies to base all their servers in India.
· He expressed his worries with this talk of data localisation. There is a legitimate concern over data privacy, but do not construct these laws in a way that will make it more difficult for India to be a hub for technology companies all over the world.
· He warned over the issue that has become one of a growing number of economic differences between New Delhi and Washington over the past few months.
· After rounds of intense trade negotiations since June, India agreed this month to put off until late September its plan to hit the U.S. with retaliatory tariffs worth $ 235 million on 29 American products.
· The action was in response to the U.S. raising tariffs on steel by 25% and aluminium products by 10%, which India has failed to get a waiver on.
· The U.S. is also taking a decision on whether to cancel India’s Generalised Systems of Preferences (GSP) status over the tariffs issue.
· The U.S. Ambassador’s comments are an indicator that trade issues will be highlighted during next month’s “2+2” ministerial engagement between India and the U.S., though the main purpose of the talks is the inaugural engagement of Defence and Foreign Ministers on both sides.
· External Affairs Minister Sushma Swaraj made it clear that she would raise the US’s proposed legislation to cut down H-1B visas during the talks as well.
· According to Mr. Juster, the Indian economy needs to open up further to get the full benefits of this innovation and entrepreneurship.
· He also compares restrictions on the Indian economy unfavourably with those prevalent in smaller countries such as Israel and Estonia.
Source : The Hindu