Prime Minister Narendra Modi and United States President Donald Trump came closer to resolving trade issues when they met in Osaka on Friday, but on technological issues such as data storage and 5G network, India placed itself across the divide from Japan and the U.S., and alongside leaders of BRICS (Brazil-Russia-India-China-South Africa).
“We recognise the importance of the interface between trade and the digital economy. We also affirm the role of data for development,” said a statement issued by the BRICS grouping after the meeting. “We are committed to transparent, non-discriminatory, open, free and inclusive international trade. Protectionism and unilateralism run counter to the spirit and rules of the World Trade Organisation [WTO],” it noted.
Briefing the media, Foreign Secretary Vijay Gokhale underlined the need for framing rules on data within the WTO and not at the G20, running counter to Japan’s initiative as the host of this year’s G20 summit, to push for “Data Free Flow with Trust, (DFFT)”. The initiative for free flow of data, announced by Japanese Prime Minister Shinzo Abe in January, came after the Reserve Bank of India’s guidelines mandating that the storage of all financial data, including by multinational companies, must be kept on servers in India. The move sparked protests from major companies such as Google, MasterCard, Visa and Amazon and the U.S. called it a major non-tariff barrier, adding to trade tensions between the countries.
On Friday, Mr. Trump hit out at countries like China and India for passing such norms. “The United States opposes data localisation and policies, which have been used to restrict digital trade flows and violate privacy and intellectual property protections,” he said at a Special Session on the Digital Economy.
During their meeting, however, Mr. Modi is believed to have stressed that data was a “new form of wealth”. The U.S. and its allies would need to take into account “the requirements of developing countries” on the issue, said Mr. Gokhale.
On the equally fraught issue of 5G technology, where the U.S. has demanded that countries ban Chinese telecom major Huawei’s 5G network because of its ability to spy on them, Mr. Modi appeared to have given Mr. Trump no assurances. According to its 5G rollout plan, India is preparing to begin technology trials in September, and while that deadline may be postponed, India has not yet decided on whether to include Huawei from the trials. If India drops the company from consideration, Beijing has made it clear it would protest the decision strongly.
Going into the bilateral meeting on Friday morning, Mr. Trump had clearly said he would discuss Huawei with Mr. Modi. After the meeting, however, India and the U.S. only spoke of collaboration on R&D between their respective telecommunication industries, not on any specific outcomes with regard to Huawei.
According to former cyber security chief Gulshan Rai, the outcome should be welcomed, as he said the “U.S. has made great strides on developing telecom technologies for routing, computing and semi-conductor chips.” He, however, added that in the case of 5G, the U.S. had not yet developed “end-to-end equipment” and thus the collaboration could only refer to outcomes in the distant future.
India’s National Security Advisory Board Chairman P.S. Raghavan told The Hindu that it would be premature to cut out Huawei or any other company at this incipient stage. “5G is becoming a fault line in the technology cold war between world powers,” he said, adding that India must avoid getting “caught” in the U.S.-China telecom tussle.
In step with that, Mr. Gokhale said Mr. Modi told Mr. Trump that India, with a billion users, would be the world’s second-largest market. “The way India moves or whatever choices India makes will essentially determine the way the global trend will go,” the Prime Minister reportedly observed.