import restriction: US trade bodies push back against Indi…[ad_1]
The Directorate General of Foreign Trade (DGFT) has placed electronics items such as laptops, tablets, all-in-one-personal computers, small form factor computers and servers under the restricted imports category, thereby requiring companies to seek an additional licence to bring these goods into the country.
In an August 15 letter, eight US-based trade bodies, including Consumer Technology Association, Information Technology Industry Council, Semiconductor Industry Association and United States Council for International Business, have asked the US Trade Representative and the US Secretary of Commerce 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". ET has seen a copy of the letter.
The adoption of the licensing measures imposed by India, the trade bodies said in their letter, raised concerns about India's reliability as a trade and supply chain partner.
More clarifications sought
These measures, they said, undermined the shared objective of deepening the bilateral economic relationship between the two countries.
In an August 3 notification, the DGFT had, citing security concerns, announced that the import of certain IT hardware products would fall under the restricted category and would therefore require a licence, effective immediately. After strong pushback from the industry, the government extended the timeline to November 1, 2023.
Later, in their meetings with the government, global IT hardware companies operating in India sought an extension of 9-12 months of the deadline for licences required for the import of IT hardware, adding that they need reasonable time to set up manufacturing and clarity around the process for licensing.
“This policy (of import restrictions) — 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,”, the trade associations said in their letter.
The non-tariff barrier to trade, at minimum, will create uncertainties and delays that will hamper the smooth functioning of international supply chains, the trade bodies said.
“World Trade Organization (WTO) rules rightfully discipline such actions, and it is critically important that the United States uphold these standards to discourage the further expansion of trade-restrictive measures in India and beyond,” they said.
The letter added that the licensing measures will also impose “considerable risk” on data centre investments in India by US companies by disrupting the import of servers, adversely affecting India’s IT sector.
The trade bodies also asked for the Indian government to provide more comprehensive clarifications and details regarding the scope of the exemptions under the licensing rule.
Citing as an example, the letter said that 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.
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