(Image source from: Business Today)
The United States ambassador to India Kenneth I. Juster has written to top American companies in India assuring them of support for a level playing field in India, according to Reuters.
In his letter, Juster urged the heads of leading U.S. technology companies in India to “participate personally” in discussions with government officials in New Delhi on e-commerce and data localization, issues that have made trade ties between the two nations resentful.
According to industry executives with direct knowledge, it wasn't common to receive such letters from the U.S. administration but described the communication as the latest sign of Washington's determination to deter India from measures that hurt its companies.
"Our Embassy will continue working with you to ensure that U.S. firms compete on a level playing field. My team at the Embassy stands by ready to help," Juster said in his letter, a copy of which was seen by Reuters.
"We look forward to your continued success in India."
Though the U.S. Embassy in New Delhi did not comment on the letter but said the U.S. companies were the biggest origin of foreign direct investment in India. "We hope that the Indian Government will pursue policies that create a welcoming and predictable environment for U.S. investors," a spokesperson said in a statement.
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According to the United States and big technology firms, India has taken a series of protectionist measures by setting stricter foreign investment rules for the online retail sector and outlining plans to force companies to store more of their data locally.
The decisions have already dealt a blow to companies such as Walmart Inc, Amazon.com Inc, Visa, and Mastercard, and the proposed data rules will also impact firms such as social media giant Facebook, Twitter and Alphabet Inc's Google.
Such proposals, according to critics, result in entry barriers for foreign firms and hold domestic Indian corporations in high regard, leading to an unfair competitive landscape between the two. Indian officials have said the rules were aimed at safeguarding interests of its small traders and citizens' privacy.
In spite of negotiations to sort out trade disputes to some extent, there has been no major breakthrough: India said last month the countries had agreed to keep on with discussions "addressing mutual trade concerns".
In his letter, Juster also said he had met Piyush Goyal, the Indian Trade Minister who told him the government was tasked on a "consultative approach" to the proposed regulations.
(Image source from: Twitter/USAmbIndia)
“There is some level of concern among U.S. officials that while Goyal has met industry officials in recent weeks, some top American company executives have not been forthright about expressing their policy concerns to the Indian government,” two other sources aware of the communication said.
"The Government of India is seeking stakeholder input, and, given the importance of these issues, we strongly encourage you to participate personally in future meetings with the Minister and other senior officials," Juster said in his letter.
It was not clear precisely how many companies received Juster's letter, but according to sources at least four U.S. technology companies had received it.
"It is not normal to get such letters, but these are not normal times," said one of the executives.
By Sowmya Sangam