The Hindu (Thiruvananthapuram)
India ‘screwed up’: How U.S. lobbied to reverse laptop rules
India reversed a laptop licensing policy after behindthescenes lobbying by U.S. officials, who however remain concerned about New Delhi’s compliance with WTO obligations and new rules it may issue, according to U.S. officials and government emails seen by Reuters.
In August, India imposed rules requiring firms like Apple, Dell and HP to obtain licences for all shipments of imported laptops, tablets, personal computers (PCs) and servers, raising fears that the process could slow down sales. But New Delhi rolled back the policy within weeks, saying it would only monitor the imports and decide on next steps a year later.
The U.S. government emails — obtained under a U.S. open records request — underline the level of alarm the Indian curbs caused in Washington, and how the U.S. scored a rare lobbying win by persuading Prime Minister Narendra Modi’s government to reverse policy.
U.S. officials have often been concerned about India’s sudden policy changes which they say create an uncertain business environment. India maintains it announces policies in the interest of all stakeholders and encourages foreign investments, even though it often promotes local players over foreign ones.
Some of the language in the documents was blunt, despite the bonhomie often displayed by both sides in public. U.S. officials were upset India’s changes to laptop imports came “out of the blue”, without notice or consultation, and were “incredibly problematic” for the business climate and $500 million worth of annual U.S. exports, the documents and emails showed.
Counterpoint estimates India’s laptop, PC market is worth $8 billion annually.
U.S. Trade Representative Katherine Tai met Indian Commerce Minister Piyush Goyal in New Delhi on August 26, soon after the policy was announced. Although the USTR’s public readout said Ms. Tai “raised concerns” about the policy and “noted” that stakeholders needed to be consulted, she privately told Mr. Goyal during the meeting that the U.S. wanted India to “rescind the requirement”, a USTR briefing paper showed.
India’s “surprise” announcement “prompts U.S. and other firms to think twice about doing business in India,” stated the ‘talking points’ of her briefing paper.
‘Concede the mistake’
Around the same time, a U.S. diplomat for trade in New Delhi, Travis Coberly, told his USTR colleagues that Indian officials had conceded the sudden rollout of the laptop licensing policy was a mistake.
India’s IT ministry “understands they (India) screwed up. They admitted as much. American companies here have been hammering them about this,” he wrote. Mr. Coberly did not immediately respond to a request for comment. The U.S. Embassy declined to comment on “private diplomatic communications”, redirecting queries to the Indian government. India’s IT ministry did not respond to a request for comment.
Replying to queries, Brendan Lynch, acting Assistant U.S. Trade Representative for South and Central Asia, said USTR was satisfied the current monitoring system so far had a minimal impact on trade but it was still closely tracking India’s scrutiny of imported devices to make sure it was implemented in line with WTO obligations and was “not having a real negative impact on the trade relationship.”