Data Localisation, E-Commerce Not Discussed at US-India Summit: US Envoy

Data localisation, e-commerce legislation and the generalised system of preferences (GSP) were not expressly discussed during talks between the United States and India, US Ambassador Kenneth Juster said on Thursday.

The US has threatened to remove tariff exemptions known as GSP, after India's introduction of legislation on e-commerce and data storage rules were seen as hurting US firms, Reuters reported last week.

The trigger for the latest downturn in trade ties was India's new rules on e-commerce that restrict the way Amazon.com and Walmart-backed Flipkart do business in a rapidly growing online market set to touch $200 billion (roughly Rs. 14 lakh crores) by 2027.

That, coming on top of a drive to force global card payments companies such as Mastercard and Visa to move their data to India and the imposition of higher tariffs on electronic products and smartphones, left a broader trade package the two sides were working on through last year in tatters.

New Indian rules announced in December for the e-commerce sector banned companies such as Amazon and Flipkart from striking exclusive deals with sellers, restricted their ability to offer discounts and barred them from selling products via vendors in which they have an equity interest.

The move disrupted product listings on Amazon's India website and forced it to change its business structures. Amazon and Walmart, as well as the US government, had lobbied against the move, Reuters reported earlier.

The new rules, coming ahead of a general election, were seen as a bid by PM Modi to placate small traders, who had for years complained about business practices of large e-commerce players.

© Thomson Reuters 2019