India says China’s complaint against its FDI rules, banning of apps at WTO lacks punch

Amiti Sen New Delhi | Updated on October 06, 2020

New Delhi asks Beijing to look at its own transparency record

India has said that China’s complaint at the World Trade Organisation (WTO) against the country’s foreign direct investment (FDI) policy and banning of apps such as TikTok doesn’t hold merit as no global laws were violated and instead Beijing should reflect on its own transparency record.

“At a recent meeting in services at the WTO where China complained about India’s banning of its apps and discriminatory FDI policy, India said that the measures adopted are fully compliant with GATS (General Agreement of Trade in Services) commitments and were aimed at also protecting the democratic rights of its citizens, ensuring privacy,” an official tracking the meet told BusinessLine.

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China complained against both India and the US for placing restrictions on Chinese mobile applications such as TikTok and WeChat at the Council for Trade in Services of the WTO late last week. It has, however, not yet filed a dispute against either India or the US.

“India is not apprehensive about China filing a dispute against the country as it believes that it has not flouted any WTO laws. All arguments justifying India’s policy measures will be presented if a case is filed. It is of utmost importance to the government to protect the privacy of its people,” another official pointed out.

Beijing accused India of discrimination on two fronts. The first complaint was against the new FDI measures announced in April 2020 requiring an entity of a country which shares a land border with India, or where the beneficial owner of an investment in India is situated in or is a citizen of any other any such country, of investing only under the government route as opposed to the automatic route. The second complaint was about several announcements by the Ministry of Electronics and Information Technology banning the use of 234 mobile apps in India, most of them developed and operated by Chinese internet companies.

China argued that the apps banned by the Indian Government cover a series of service sectors where India has made specific schedule commitments under GATS, including computer-related services, telecommunications, audio-visual services and financial services. It said that the Indian government should stop the “discriminative measures” and provide a level playing field for Chinese companies.

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India’s representative said that the country had a very good transparency track record in upholding the principles of multilateral trading system and it firmly believed in pushing for inclusive trade and services. That is why the country was a recognised, valued and trusted partner. Even during the Covid-19 lockdown of its services industry, India had met its global commitments.

“India asked China to reflect on its own transparency record and also on the fact that it had been reluctant to fully open to foreign trading services,” the first official said.

Published on October 06, 2020

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