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    India reverses laptop licensing policy

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    Source: Reuters

    India reversed a laptop licensing policy after behind-the-scenes lobbying by U.S. officials, who however remain concerned about New Delhi’s compliance with WTO obligations and new rules it may issue, according to U.S. trade officials and government emails seen by Reuters.

    In August, India imposed rules requiring firms like Apple (AAPL.O), opens new tab, Dell (DELL.N), opens new tab and HP (HPQ.N), opens new tab to obtain licences for all shipments of imported laptops, tablets, personal computers and servers, raising fears that the process could slow down sales. But New Delhi rolled back the policy within weeks, saying it will only monitor the imports and decide on next steps a year later.

    The U.S. government emails – obtained under a U.S. open records request – underline the level of alarm the Indian curbs caused in Washington, and how the U.S. scored a rare lobbying win by persuading Prime Minister Narendra Modi’s usually inflexible government to reverse policy.

    U.S. officials have often been concerned about India’s sudden policy changes which they say create an uncertain business environment. India maintains it announces policies in the interest of all stakeholders and encourages foreign investments, even though it often promotes local players over foreign ones.

    Some of the language in the documents was blunt, despite the bonhomie often displayed by both sides in public. U.S. officials were upset India’s changes to laptop imports came “out of the blue”, without notice or consultation, and were “incredibly problematic” for the business climate and $500 million worth of annual U.S. exports, the documents and emails showed.

    Research firm Counterpoint estimates India’s laptop and personal computer market to be worth $8 billion annually.

    U.S. Trade Representative Katherine Tai met Indian Commerce Minister Piyush Goyal in New Delhi on Aug. 26, soon after the policy was announced. Although the USTR’s public readout said Tai “raised concerns” about the policy and “noted” that stakeholders needed to be consulted, she privately told Goyal during the meeting that the U.S. wanted India to “rescind the requirement”, a USTR briefing paper showed.

    India’s “surprise” announcement “prompts U.S. and other firms to think twice about doing business in India,” stated the “talking points” of her briefing paper.

    Around the same time, a U.S. diplomat for trade in New Delhi, Travis Coberly, told his USTR colleagues that Indian officials had conceded the sudden rollout of the laptop licensing policy was a mistake.

    India’s IT ministry “understands they (India) screwed up. They admitted as much. American companies here have been hammering them about this,” he wrote.

    Coberly did not immediately respond to a request for comment. The U.S. Embassy in New Delhi declined to comment on “private diplomatic communications”, redirecting queries to the Indian government.

    India’s IT ministry did not respond to a request for comment.