“New protectionist measures, together with elevated tariffs, procurement guidelines that restrict aggressive decisions, sanitary and phytosanitary measures not based mostly on science, and Indian-specific requirements not aligned with worldwide requirements, successfully closed off producers from international provide chains and restricted the growth in bilateral commerce,” it stated within the newest Funding Local weather Statements.
The stand is in step with the US authorities stance on a number of points with the India too accusing Washington of sustaining a number of restrictions. Apart from, Indian authorities have typically argued that the insurance policies don’t violate India’s worldwide commitments. Whereas liberalising FDI has been a key theme of successive governments, the US complained of stakeholders being unnoticed of the session course of.
It additionally pointed to FDI guidelines for aviation, the place 100% abroad flows have been permitted, whereas the substantial possession and efficient management (SOEC) guidelines that mandate majority management by Indian nationals haven’t been clarified but. Equally, it was vital of “discriminatory” FDI coverage for insurance coverage sector as a result of Indian administration and management rider, though the ceiling was elevated to 74% earlier this yr. A serious space of fear is the information localisation and storage necessities. It stated RBI’s order on storing knowledge on fee transactions throughout the nation has led to vital compliance prices and elevated threat of cybersecurity vulnerabilities, though American banks have managed to adjust to the requirement. Equally, it was vital of the Personal Data Protection Bill.
“The localisation of all ‘delicate private knowledge’ being processed in India might immediately affect IT exports. Within the present draft, no clear standards for the classification of ‘vital private knowledge’ has been included,” it stated. The opposite space of concern is the equalisation levy on tech corporations, the place the US had threatened retaliatory motion. It additionally flagged the retrospective tax concern.