Indian and United States Trade Representative(USTR) has held discussions on various trade and economic issues.
Deputy USTR has said that the US will consider 301 investigation against India if the trade issues between the two countries are not resolved.
301 probe is employed as a precursor to tariffs and other trade measures against a country.It can result in the U.S imposing tariffs or taking other trade action against its trading partners if the parties do not come to a settlement.
Section 301 of the U.S. Trade Act,1974 was also authorised in a 2017 probe that resulted in tariffs on Chinese exports to the U.S.Earlier this week,the USTR had announced a 301 probe against France on a digital services tax.
Recently,French had imposed a digital service tax of 3% on internet giants like Google,Amazon and Facebook.This was done to stop multinationals from avoiding taxes by setting up headquarters in low-tax European Union(EU) countries.
However,deputy USTR has also said that India finalising data localisation policies could be deal-breaker across the board between the two countries.
Data localisation refer to regulations that dictate how data on a nation’s citizens is collected, processed and stored inside the country.
In 2018,the Reserve Bank of India(RBI) had asked payment firms to ensure their data are stored exclusively on local servers.This had affected US foreign firms such as Mastercard and Visa.