US trade bodies push back against India’s IT hardware import curbs; From License Raj to Monopoly Kings, Who Are We Fooling?

US Trade Bodies Taking Up The Challenge

Remember when getting a license to open a business was like navigating a labyrinth designed by Kafka himself?
It was a true test of one’s patience, willpower, and ability to withstand bureaucratic jargon. But hey, who needs efficiency and innovation when you can have endless paperwork and arbitrary approvals, right?

In the License Raj era, obtaining a business license was an art form or perhaps a thrilling game of chance (Hmmm, today, even the online gaming websites are crying, though, because of the almighty GST).

Entrepreneurs navigated the labyrinth of paperwork; you’d submit your application, cross your fingers, and wait for a response that could arrive anytime between next week and the next century.
And if you were really lucky, you might even receive a license for the business you applied for, although it might have had nothing to do with your actual expertise or aspirations.
Who cares about specialization when you can be a proud owner of a random, government-approved enterprise?

The Fight Back
US trade bodies oppose India’s restrictions on IT hardware imports. Several US-based trade bodies, including prominent companies like Apple, Google, Lenovo, Dell, and HP, have appealed to the United States to persuade India to withdraw its limitations on importing IT goods.
They also call for formal consultations with industry stakeholders; why?

Because the Indian government has categorized laptops, tablets, and other electronics as restricted items, meaning that companies need additional licenses to bring these products into the country, and the trade bodies express discontent over these introduced licensing measures without prior consultation.

Prominent global IT and electronics manufacturing giants, such as Apple, Intel, Google, Lenovo, Dell Technologies, and HP, are urging the US government to utilize all available platforms to convince India to reconsider its policy of import restrictions on IT hardware. They also recommend initiating a formal stakeholder consultation to gather industry recommendations.

The Directorate General of Foreign Trade (DGFT) has classified electronics like laptops, tablets, all-in-one personal computers, small form factor computers, and servers as restricted imports, demanding additional licenses for their import.

In a letter dated August 15, eight US-based trade bodies, including the Consumer Technology Association, Information Technology Industry Council, Semiconductor Industry Association, and United States Council for International Business, have called upon the US Trade Representative and the US Secretary of Commerce to engage with the Indian government extensively.

Their goal is to ensure that India’s measures in the ICT sector align with its international trade obligations and commitments.
The trade bodies highlight that adopting India’s licensing measures raises doubts about the country’s reliability as a trade and supply chain partner. They assert that these measures contradict the mutual objective of strengthening the economic relationship between the two nations.

In an August 3 notification, citing security concerns, the DGFT announced the inclusion of specific IT hardware products under the restricted category, necessitating licenses with immediate effect. After encountering strong opposition from the industry, the government extended the deadline to November 1, 2023.

Global IT hardware companies operating in India, during their discussions with the government, requested an extension of the license deadline by 9-12 months. They also emphasized the need for sufficient time to establish manufacturing facilities and clarity on the licensing process.

The trade associations, at the same time, also criticized the policy of import restrictions, stating that it was introduced abruptly without prior notice or public input. They warned that such a policy could disrupt trade, hinder India’s integration into global supply chains, and negatively impact businesses and consumers in both countries.

They emphasize the importance of upholding World Trade Organization (WTO) rules to discourage the expansion of trade-restrictive measures.
The trade bodies also cited that this non-tariff trade barrier will introduce uncertainties and delays that impede the smooth operation of international supply chains.

Moreover, the trade bodies express concern that these licensing measures could pose a significant risk to US companies’ data center investments in India by disrupting server imports, ultimately affecting India’s IT sector.

The trade bodies call for comprehensive clarifications and details from the Indian government regarding the scope of exemptions under the licensing regulations. They provide an example of how the import license requirement could hinder one company’s ability to export computers from the US to India with pre-loaded software intended for manufacturing.

Resembling India’s historical bureaucratic “license Raj,” the resurgence of a restrictive licensing culture is concerning.

The Rise Of The Tycoons, The Ambani’s And The Adani’s
Today, however, we’ve witnessed the rise of Ambani and Adani, the ultimate monarchs, the shining knights of the business world: Ambani and Adani, the dynamic duo.

They’re like the superheroes of monopolies, spreading their influence across industries like an all-consuming black hole. From retail to energy, they’ve got their fingers in every pie, and they’re not leaving any crumbs for the little guys.

Who needs competition when you can have the sheer joy of a single entity ruling the entire kingdom?

Gone are the days of equal opportunity; instead, these modern titans rule various sectors with an iron grip, ensuring that competition is a term better left in the past.

The irony doesn’t stop there. While the License Raj was a masterclass in stifling variety and innovation, Ambani and Adani have elevated it to a craft form and let’s not forget their benevolence toward the Indian citizens.

They generously provide a curated selection of goods and services handpicked by them for your convenience. It’s like a retail dictatorship, where your choices are limited to what they deem worthy. Why bother with pesky things like variety, diversity, and consumer autonomy when you can simply be told what to buy and where to buy it?

Oh, and the way they’re making it tough for other players to compete?

Pure genius. It’s like a modern-day gladiator arena, where only the fittest (or the most well-connected) survive. Who needs innovation and fresh ideas? They are overrated, anyway. Let’s just stick to the tried-and-true formula of cornering the market and squeezing out any potential threats.

But here’s the real cherry on top: remember how License Raj made sure that only a select few could participate in the economic game?

Well, the new monopolies have taken it up a notch since they’re not just limiting participation; they’re dictating the entire consumer experience.

It’s not just about what you buy; it’s about where you buy it, how you buy it, and who profits from it. Who cares about free markets and fair competition when you can have the joy of being told what’s good for you?

So, there you have it, folks; while the License Raj might be a distant memory, but in actuality, the spirit of controlled markets and limited choices lives on now in the form of our beloved modern-day monopolies.

The Last Bit, The License Raj era, we may look at it with fond sarcasm, yet we are confronted with the reality, new chains may have replaced the past’s shackles, only this time, modern-day monopoly moguls hold them.

The journey from bureaucratic tangles to the empire of monopolies might seem like progress, but in truth, it’s a mere transition from one form of control to another.

Hence, whether it’s the maze of red tape or the web of corporate domination, the essence remains unchanged – limited options stifled innovation and a system that prioritizes power over progress.

They say history has an uncanny knack for repeating itself, but history can also provide one the opportunity to learn from our past mistakes and not repeat them, so will we let history repeat itself albeit with a modern twist remains to be seen? Until then, Cheers!