Top global information and communications technology (ICT) firms, including Apple, Amazon, Google, and Microsoft, have made a strong representation to the US government against India’s move to license import of laptops, tablets, personal computers and servers from November 1.
Eight industry, associations whose membership also includes the likes of AMD, HP, Dell, Intel, Cisco, Samsung, IBM, Meta, and Micron, have written to United States Trade Representative, Katherine C Tai, and US commerce secretary Gina M Raimondo. They have said the US government should urge the Indian government to reconsider implementation of this policy and launch a stakeholder consultation to formally solicit recommendations from industry and all relevant stakeholders.
“We urge you and your colleagues throughout the administration to use every available forum of engagement with the government of India to ensure that its measures in the ICT sector are consistent with India’s international trade obligations and commitments, support rather than detract from efforts to deepen trade and supply chain linkages, further shared goals toward digitalisation and digital inclusion, and are developed in a manner that is consultative,” the letter has said.
The industry associations have said that the only inference they can draw is that the move is intended to boost domestic manufacturing and pressure companies to participate in the government’s production-linked incentive (PLI) scheme.
“If true, this would be an incredibly disappointing development and undermines India’s interest in becoming a reliable and resilient supply chain partner. Moreover, mandatory import licensing for these products violates India’s commitments as a member of the World Trade Organisation,” the letter has said.
The companies have jointly come forward to point out that the licensing regime will affect imports of products made by US companies, including some products manufactured in the United States. Further, as one example of how this measure will negatively impact US manufacturing investment in India, one company has indicated that this import licence would inhibit their ability to export computers from the US to India with pre-loaded software intended to facilitate manufacturing at multiple facilities in India.
“Within India, it risks creating scarcity and price increases for citizens, businesses, and students that rely on computing equipment to engage in the modern economy,” the industry associations have said.
At the same time, the requirement risks creating a major impediment for US and allied businesses operating or seeking to build or expand operations in India, “by complicating their ability to reliably source products necessary to equip employees and run their operations”, the letter said.
The companies have highlighted that import licensing measures also impose a considerable risk to US companies’ significant investment in data centres in India. If the licensing requirements disrupt imports of servers, the data centre investments are likely to suffer, which will also adversely impact India’s IT sector and all the Indian stakeholders that utilise this technology.
The industry associations have said that the policy, which was announced with no prior notice or public consultation, could significantly disrupt trade, hamper efforts to more closely integrate India into global supply chains, and harm businesses and consumers in both countries. “We urge you to raise this issue as a matter of urgency in your engagements with the Indian government, and take steps to ensure that any measures taken by India in this area are consistent with its international commitments,” the letter has said.