US's objections to India's e-commerce policy should be viewed as a continuation of their global assault on trade.
The United States has criticised India’s restrictions on cross-border data flows and data localisation requirements. It has termed India’s move as a barrier to digital trade in its 2019 National Trade Estimate Report on Foreign Trade Barriers. It said these requirements raise input costs for internet-based suppliers of services by forcing the construction of data centres and preventing local, indigenous firms from taking advantage of the best global practices available by impeding and restricting competition to these companies. The Indian government’s draft e-commerce policy calls for regulating cross-border data flow, banning the sharing of data of Indian users stored abroad with other business and third-party entities, and mandating that all e-commerce companies have data storage in India.
This comes hot on the heels of last month’s announcement that they will end preferential trade treatment for thousands of Indian products guaranteed under the Generalised System of Preferences (GSP), a programme that aims to promote trade with more than a hundred developing countries by giving duty-free entry for their goods. This is Trump’s modus operandi—to economically arm-twist opponents until they give his country some concessions, as demonstrated by US’s trade tussle with China, the outcome of which still lies in the balance. He has recently threatened to implement tariffs on goods worth $11 billion from the EU as well. With internet companies and social media platforms, both collectors and databases of massive troves of data on individuals, coming under increasingly intense scrutiny for the propagation of content on their platform and with privacy and ownership of data becoming a resultant matter of central concern, stringent policy proposals like India’s e-commerce one are bound to come up. EU has the General Data Protection Regulation and Brazil, Japan and Australia are just three more countries that currently have a data protection and/or privacy law. India is right to introduce such legislation and should stand its ground, especially as the US’s increasing hostilities with the rest of the world might open up grander trading opportunities as a result.