ISSN 2330-717X

Revival of India-US ICT Working Group: Significance for India – Analysis

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By Rahul Jain

The India-U.S. ICT Working Group (WG) met in Washington D.C. on January 14-15, 2015 after a long gap since its establishment in 2005. A welcomed development, the WG provides an institutional platform to bring forth and discuss ICT related issues and developments. Given that both the U.S. and India have many common interests as far as the ICT sector is concerned, this platform can be leveraged to strengthen business ties as well as establish common understanding on various global issues including those related to cyber security, privacy, cross-border data flows and internet governance.

The WG meetings were enthused by the flagship projects of the Modi government-‘Digital India’ and ‘Make in India’ – and the excitement on both sides was quite palpable. While the Digital India project promises new business opportunities for the U.S. tech industry, it is widely understood and appreciated that the Indian government would need assistance of U.S. tech companies in making the project successful. With regard to’ Make in India’, the message from the U.S. industry is clear – India needs to resolve many internal issues including those related to taxation, inverted duty structures and mandatory local manufacturing among others, to eventually make India a competitive and attractive destination for manufacturing. To this effect, India highlighted the steps being taken by the Indian government for addressing the issues. These included incentives provided by the government to the industry for setting up manufacturing facilities in India.

Not surprisingly, while there were spectrum of issues raised by the U.S. side (including those pertaining to FDI in e-commerce, telecom licensing reforms, telecom equipment security testing, spectrum availability, optical fibre layout, encryption standards, satellite commerce, product safety certification, among others), the Indian side raised the core legacy issue of immigration and totalization. In this context, “the U.S. side noted the Indian concerns with regard to mobility of skilled Indian professionals, and agreed that the U.S. government will continue to engage on visa issues for skilled professionals”1

Effective engagement by India

While the above issues will take multiple rounds of discussions and actions to get resolved- if at all, India needs to explore how it can best leverage this platform to its own advantage. Projects like Digital India, which include development of smart cities, now provide strategic levers to India (which were perhaps not available erstwhile) to better negotiate on its issues and bargain with the U.S. India needs to create mirror platform(s) in the country in collaboration with industry bodies to identify range of issues, in addition to those related to immigration, which can be brought forth in this forum. A crucial issue raised in this regard related to difficulties faced by the Indian law enforcement authorities in getting lawful access to data stored in the ‘cloud’ (many of cloud providers are U.S. based companies and the data is stored in the U.S.)and the need to address this issue through bilateral or multilateral dialogue or actions. A more proactive scanning of the ICT related policy environment in the U.S. needs to be done by India to identify existing or possible issues. As a case in point, President Obama recently announced some legal proposals regarding privacy protection. Assessing how these will impact the Indian industry would require some homework, so that, an alarm (if any), is raised in the WG. Further, to effectively engage in this platform, India needs to build internal processes for issue identification, prioritization, consultation, coordination and authorization; and find ways to enhance collaboration among government agencies, between government and industry and within industry; with the unified aim of taking well-informed, well-debated, and consensus-driven national positions in this forum.

Opportunities for both sides

As highlighted previously, the U.S. and Indian ICT industry have many common interests in terms of how technologies are adopted around the world, and the potential role played by governments. Hence, while the WG is leveraged to address bilateral issues, it is also an important platform for both sides to better comprehend each other’s positions and concerns and establish synergies when pursuing global opportunities or engaging in global issues, such as, cross-border data flows, cyber security, internet governance and e-commerce, among other contemporary issues. For example, restrictions imposed by governments on cross-border data flows are bound to negatively impact business prospects of ICT industries of both sides, particularly in the light of cloud computing, Internet of Things and Machine to Machine (M2M) technologies. The two countries can also ensure that any efforts taken by either country to discourage governments to restrict data flows are well aligned. In such cases, U.S. can in fact share its learning with India, given its success in negotiating a safe harbour with the EU, whereas India is still in negotiating mode for ‘adequacy’ status. An additional area where both countries will need better alignment, is related to WTO discussions on e-commerce where the U.S. has mooted a proposal which calls for discussion on mandatory data or ICT infrastructure localization, restrictions on cross-border data flows, need for distinction between cloud and telecom services -among other issues that have direct or indirect bearing on the e-commerce business. Yet another contentious issue is one of internet governance where U.S. would like India to support the western position of maintaining a multi-stakeholder model. It is plausible that U.S. can use the WG as a platform to pressurize or influence Indian thinking. The lack of a well-consulted and consistent national position on internet governance, which takes into account various facets of internet adoption in the country, makes the situation more challenging for India.

India’s strategy on ICT engagement

In this light, India will have to diligently craft its strategy when engaging with the U.S. on ICT matters. Any such strategy will have to be in sync with its economic interests (the outsourcing sector as well as the other domestic sectors) and national security interests. An ideal bilateral dialogue or negotiation should be a win-win proposition for both in all respects, i.e., issues should not be one sided, benefits should be mutual and both parties should emerge as equals. In this respect, the India-U.S. ICT WG will be a testing ground for India.

(The author works as a Principal Consultant at the Data Security Council of India (DSCI)).

Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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