India concerned by U.S. move to restrict IT trade

Wednesday, 19 November 2003, 08:00 Hrs
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BANGALORE: The Indian government and the tech sector have been concerned by recent moves in the U.S. to restrict trade in IT services and IT-enabled services, Foreign Secretary Kanwal Sibal said here Wednesday.

Sibal was speaking a meeting here of the India-U.S. High Technology Cooperation Group (HTCG), which also focused on expanding bilateral defence ties to co-development and co-production of defence equipment.

"The proposed anti-legislature measures by a few states in the U.S. on IT outsourcing and offshoring needs to be addressed squarely, as such attempts would only hinder ongoing progress in high technology areas between the two countries," said Sibal.

The HTCG meeting was organised by the Confederation of Indian Industry (CII) and National Association of Software and Service Companies (Nasscom) on the eve of a high-level bilateral meeting Thursday in New Delhi to be chaired by Sibal and U.S. Under Secretary of Commerce Kenneth Juster.

The U.S. moves to restrict IT trade were likely to figure in Thursday's meeting, Sibal said.

This was the second meeting of the HTCG and it focused on fostering bilateral hi-tech commerce, including trade in strategic goods and technologies.

Sibal also hinted at a possible agreement on leveraging government and private resources to connect the Indian and U.S. economies in hi-tech areas such as biotechnology, education technology, nano-technology and telemedicine.

A 30-member U.S. delegation and captains of Indian industry attended the HTCG meeting.

The daylong session dwelt on the framework for addressing various issues like regulatory measures, confidence-building steps, technology security and reaching out to the industry in both countries to overcome the impact of U.S. sanctions on India in the wake of the Pokhran nuclear tests of May 1998.

Referring to the HTCG's first meeting in Washington about four months ago, Sibal said: "In the first meeting, we looked into tariff issues on IT products, customs procedures and trade facilitation measures at Indian ports.

"Going forward, the dialogue will be on data privacy, cyber security and e-commerce that have a direct bearing on the Indian IT and IT-enabled services trade."

Responding to the Indian concerns, Juster agreed Indian and U.S. industries needed to be educated on U.S. trade policies governing import and export controls to dispel misperceptions.

"We need to educate the American people and U.S. media on the cost benefits of outsourcing IT projects to countries like India, which has a reservoir of skilled talent pool and core competencies," he noted.

On export and import controls, Juster said in the aftermath of lifting of sanctions, the number of license approvals for Indian firms have gone up substantially.

"The approval rate during this year is over 90 percent. The U.S. Administration has granted as many as 700 licenses to Indian firms for exporting their goods into our country.

"The number is more than what has been given to British firms with 500 licenses and next to Japan with 900 licenses," he said.

Juster urged the Indian government to remove impediments on trade investments by U.S. firms and to raise the cap on foreign direct investment in defence ventures from the present 26 percent.

"Incredible opportunities exist for the private sector in both countries to foster greater trade ties in high technology and stimulate growth, higher investments and thousands of new jobs," Juster said.

During his trips to Hyderabad and Chennai over the past two days, Juster sought India's commitment to lower barriers for greater market access to U.S. firms and products in hi-technology areas.

"It has to be a two-way street. If access to the Indian tech industry for a greater share of the U.S. market means more jobs here, market access to U.S. products in India should be reciprocated," Juster noted.

Proposed agreements to be signed Thursday will enable the U.S. to provide better access to India in civilian space, nuclear technology and dual-use defence technologies.

In return, India is expected to ease trade barriers on U.S. hi-tech firms.

Source: IANS
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