NEW DELHI: US Secretary of State Michael R Pompeo’s talks with his Indian counterpart S Jaishankar on Wednesday broke the ice between the two nations, but did not resolve India’s trade dispute with its largest trading partner, while the row over the country’s plans to locally store net-based payment data seemed to deepen with Reserve Bank of India (RBI) Wednesday reiterating that all “payment data shall be stored in systems located only in India.”
Pompeo’s visit comes after the United States unilaterally scrapped duty-free export facility to over 2,000 product categories from India, which retaliated by raising duties on 28 US exports including almonds and apples.
India and US are “friends who can help each other all around the world,” Pompeo told a joint news conference with Foreign Minister Jaishankar after the meeting, adding that current differences were expressed “in the spirit of friendship”.
However, officials said that no real progress was made in resolving the trade dispute between the two nations, nor on India’s rules for e-commerce, which USA considers as restrictive. “It was more a laying out of our respective positions … nothing was resolved today … some solutions may come at the summit level meeting between Prime Minister Narendra Modi and US President Donald Trump at the G20 summit,” said Pinak R Chakravarty, former secretary of Economic Relations in the MEA.
Officials said one fallout of the visit is that India’s state-run oil firms will be looking at increasing their offtake of oil from America. US crude exports to India has already gone up from 7.82 million barrels in June 2018 to 12.75 million barrels in March 2019.
At the same time, in a move seen by analysts as deliberate, the Reserve Bank of India said all net payments data has to be stored in India and data processed abroad has to be brought back within 24 hours. The RBI, in a series of frequently asked questions, said, “The entire payment data shall be stored in systems located only in India.”
These rules had been protested by the US as they impacted trans-nationals such as Google, Visa, Mastercard operating in India.
While RBI said there was no bar on processing payment transactions in processor units abroad, “the data shall be stored only in India after processing” and the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier”.