NEW DELHI: The US bilateral trade deal with India includes several provisions that may benefit exports of US ICT goods such as laptops, computers, and tablets to India. According to a statement released by the US on Saturday, India will eliminate restrictive import licensing measures that delay or limit US ICT goods and will decide within six months whether US-developed or international standards, including testing requirements, are acceptable for imports in identified ICT sectors.
Currently, US companies face delays and limits when selling their products in India because of strict import licensing rules, caps on the number of items allowed, and testing standards that are different from global norms. Under the agreement, India will decide within six months whether it will accept US or international standards, such as ISO and IEC, for ICT products. This means products that already meet US or global testing standards may not need extra testing in India.
“India agrees to address long-standing barriers to the trade in US medical devices; eliminate restrictive import licensing procedures that delay market access for, or impose quantitative restrictions on, US Information and Communication Technology (ICT) goods; and determine, with a view towards a positive outcome, within six months of entry into force of the Agreement whether U.S.-developed or international standards, including testing requirements, are acceptable for the purposes of U.S. exports entering the Indian market in identified sectors,” reads the statement.
The trade deal also says that India and the US will increase trade in technology products, including GPUs and other equipment used in data centres, and work more closely on technology. This means India may buy a large number of GPUs from the US. To support its AI plans, the Ministry of Electronics and Information Technology has approved Rs. 10,371.92 crore for five years starting March 2024, mainly for buying GPUs. India has already crossed its initial target, with more than 38,000 GPUs and TPUs in place by early 2026. The government is now planning to add another 25,000 GPUs, taking the total to over 65,000 units soon. Industry experts say India may ultimately need at least 100,000 GPUs to stay competitive globally.
However, industry experts believe these provisions could hurt India’s electronic manufacturing sector. According to the think tank Global Trade Research Initiative (GTRI), the provisions could weaken India’s long-standing position at the World Trade Organization against a permanent moratorium on customs duties on electronic transmissions. They may also limit India’s ability to levy equalisation taxes or regulate its digital sector in the future, thereby reducing its digital policy space.
“The United States is seeking largely one-sided commitments from India on digital trade by pushing for the removal of barriers to digital commerce and the adoption of clear digital trade rules under the BTA. In doing so, the U.S. is likely aiming to secure from India the same concessions it obtained from Malaysia, including a ban on digital services taxes and similar levies,” said GTRI in a statement.