India must reclaim its lost digital
space (The Hindu)
Mains Paper 3: Economy
Prelims level: Not Much
Mains level: International Trade
- India will not join the e-commerce negotiations at the WTO until issues
like data flow and welfare to the poor are resolved.
- This firm articulation by Commerce and Industry Minister Piyush Goyal at
the G20 Ministerial at Tsukuba, Japan, on June 8 and 9 underlined that India
would not bow to pressure on an issue on which India’s digital future hinges
- Most of us are unaware that away from the public glare a quiet battle is
raging for control of the global digital business. At the core is the US
quest to continue its dominance of digital business.
- Today, US technology firms dominate the digital business. But continued
dominance would require the free flow of data across countries.
- The US and its allies are doing everything to ensure this. The outcome
of this battle would decide the fate of the digital business in most
What should India do?
- The US firms Google, Facebook, Amazon, Airbnb, Visa/Mastercard, Uber,
Netflix and Instagram may appear to be doing different activities. But,
their main business is data.
- They track our digital transactions, chats, roads we travelled,
countries we visited, hotels we stayed, restaurants we ate, food we ordered,
medicines we bought, and bars we visited. The game is in collecting
extensive data free of charge and selling value-added services created from
- Data has another significant use. Remember Siri or Alexa. Developing
such Artificial Intelligence (AI) tools requires scanning terabytes of
unstructured data to identify patterns of our thoughts, actions, behaviour
and create applications for all conceivable areas.
- The problem is most data is generated in China and India. India produces
more data than the US and the EU put together. China does not share data
with US firms. So if India also restricts data flow, it will hit the US-AI
- Today the US is collecting data freely from all countries, except China.
But the US knows this will change soon. Technology and business models are
easy to replicate at low cost. Soon as India and other countries develop
similar tools, they may regulate data flows preferring local firms over the
US firms. Or these countries may decide to charge for data. Any of this will
kill the US business model. The US is putting in all its might to stop this
- First, governments would have no control over violations caused by
digital business. Online sites recruit terrorists, peddle child porn,
traffic drugs. We have seen the allegations that Russia manipulated US
presidential elections in 2016 through social media.
- Facebook peddles fake news, and Google search results can distort public
opinion. National laws will not apply as people behind such sites sit in
- Second, free flow of data creates digital monopolies that hurt
competitors, so crucial for the growth of the sector. Monopolies make
competition difficult for new firms, buy the promising ones, and if nothing
works, copy the best features.
- The deep pockets allow e-commerce firms to use billion dollar sales,
discounts and cash-backs to lure buyers.
- Domestic stores can never survive such onslaught. Countries suffer all
adverse consequences but get no payments even though the data belongs to
- As digital business becomes big, payment for import of digital products
would soon be a significant forex issue.
- Quickly introduce central laws regulating e-commerce, data protection,
data localisation, cyber security, etc. New draft e-commerce policy is a
welcome step. Clear laws with proper regulations on data flow will signal
global and local firms to invest in India.
- Develop national champions. This has been our weak area. Set up free
email service, and create an India focussed search engine. Invest in high
capacity cloud servers, and make them available at low prices. Hosting on
Indian servers must be attractive for local businesses. NIC has the
expertise and already developed many platforms for government uses. The
government may revive NIC, hiring the best talent for AI research and other
- Create a coalition of like-minded countries. Countries still do not
grasp the significance of data flow, server localisation, etc. India must
educate them. Once our laws and platforms are ready, we may take the call to
join any international negotiations.
- Be aware of the consequences of not joining the negotiations. Few
experts argue India should join the talks and say what suits it. They forget
the history of WTO negotiations. The US writ always prevails. The US uses
grants, diplomacy, threats and sanctions to pursue its agenda.
- Today, only 73 of the 164 WTO members support negotiations on
e-commerce. If India, viewed as a software giant, joins, all remaining
countries will participate.
- This will soon ensure the de facto dominance of the US in digital
business becomes de jure.
- On the business side, few experts fear that India’s ITES exports will
suffer if we do not join the WTO negotiations.
- The truth is, US commitments under the WTO rules on services govern
India’s access to the US market. New e-commerce rules cannot take liberty
- Digital business accounts for a third of global GDP now, and its share
will only increase.
- Reclaiming our lost digital space should be our top priority as best
jobs and high growth would flow from this. An important enough issue to
invest our national pride.
Q.1) With reference to the Right to Information Act, 2005, which of the
following statements is/are correct?
1. It provides for the appointment of a public information officer in each
2. The Official Secrets Act, 1923 overrides the RTI Act.
3. No court can entertain any suit, application or other proceedings in respect
of any order made under the Act.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Q.1) To what extent the US’ dominance by creating new laws to regulate
e-commerce, and developing home-grown champions, is a must. Comment.
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