India took a U-turn on laptop licensing policy after pushback from the USA

News Excerpt:

The Indian government recently rolled back the laptop licensing policy after pressure from US officials.

About the Policy and Reversal:

  • In August 2023, India's Directorate General of Foreign Trade (DGFT) implemented a licencing policy that requires firms such as Apple, Dell, and HP to seek licences before importing laptops, tablets, PCs, and servers. 
  • However, the Indian government chose to reverse this stance after being criticized by US officials, particularly the US Trade Representative. 
  • The decision to repeal the licencing requirement was motivated by diplomatic negotiations and worries about the impact on business settings.

Impact of reversal:

  • The reversal of the laptop licencing policy exemplifies the delicate balance between regulatory measures and international trade ties. 
  • While the Indian government claims that the decision was based on local manufacturing needs, it highlights the complexities of global trade discussions. 
  • Moving ahead, ongoing trade policy monitoring and adherence to international responsibilities will be critical to ensuring a stable and accommodating business environment.

USA’s view on India’s laptop licensing policy:

  • U.S. firms perceived the move as highly protectionist and out of sync with India's progress in improving the investment environment.
  • India has taken several decisions that have hit American firms—like forcing Mastercard and Visa to store data locally and forcing Amazon to open a new tab to comply with stringent rules for e-commerce, which once disrupted its operations.
  • US officials expressed ongoing worries about India's "out-of-the-blue" policy changes, which they argue create an uncertain business environment.
  • They highlighted the adverse impact on the business climate and the annual exports to India, valued at around $500 million.

Research firm Counterpoint estimates India's laptop and personal computer market to be worth $8 billion annually, underlining the economic importance of the policy reversal.


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