Editorial 1: The concerns about India-U.S. digital trade
Context
- During Prime Minister Narendra Modi’s U.S. state visit, cooperation on technology emerged as a prominent talking point and yielded some of the most substantive outcomes, according to Foreign Secretary Vinay Kwatra.
The current status of India-U.S. technology trade
- Notably, in FY2023, the U.S. emerged as India’s biggest overall trading partner with a 7.65% increase in bilateral trade to $128.55 billion in 2022-23.
- However, digital or technology services did not emerge as one of the sectors at the forefront of bilateral trade.
- The Computer & Communications Industry Association (CCIA) headquartered in Washington DC points out in its report that “despite the strength of the U.S. digital services export sector and enormous growth potential of the online services market in India, the U.S. ran a $27 billion deficit in trade in digital services with India in 2020”.
- In the recent past, however, the two countries have been ramping up their tech partnership through moves like the Initiative on Critical and Emerging Technology (iCET) announced by President Joe Biden and Prime Minister Narendra Modi last year.
- Additionally, under the iCET, India and the U.S. also established a Strategic Trade Dialogue with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.
Concerns of U.S. tech firms
- The CCIA, while appreciating the reinvigorated efforts to ramp up trade through bilateral initiatives, has flagged in its note, the “significant imbalance” and “misalignment” in the U.S.-India economic relationship.
- They also addressed that the U.S.’s extension of market access, trade and openness to Indian companies to operate and succeed in the U.S. has not been reciprocated by the Indian side.
- Adding that the Indian government has deployed a range of tools to champion their protectionist industrial policy tilting the playing field away from U.S. digital service providers in favour of domestic players.
- To describe these discriminatory regulation and policies, it cites the example of India’s guidelines on the sharing of geospatial data, which it accuses of providing preferential treatment to Indian companies.
- It has also expressed discontent over India’s veering away from longstanding democratic norms and values, and seeking greater government censorship and control over political speech which it argues has made it extremely challenging for U.S. companies to operate in India.
Concerns of taxation measures
- One of the taxation tools that U.S. tech firms have long taken exception to is the expanded version of the “equalisation levy” that India charges on digital services.
- India in 2016, with the goal of “equalising the playing field” between resident service suppliers and non-resident suppliers of digital services imposed a unilateral measure to levy a 6% tax on specific services received or receivable by a non-resident not having a permanent establishment in India, from a resident in India who carries out business.
- The equalisation levy, when it was first introduced in 2016, led to double taxation and further complicated the taxation framework.
- Besides, it also raised questions of constitutional validity and compliance with international obligations. The 2020 amendment again led the levy to become sweeping and vague in its scope.
India’s IT Rules 2021
- The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, has been flagged by the consortium of foreign tech firms under the some of the most “problematic policies”.
- The IT Rules place compliance burden on social media intermediaries (SMIs) and platforms with five million registered users or more, which means several U.S. firms end up falling under the ambit.
Suggestions
- The IT Rules require intermediaries to take down content within 24 hours upon receiving a government or court order.
- The platforms are also required to appoint a local compliance officer.
- Moreover, with the amendments made to the Rules late last year, SMIs are now obligated to remove, within 72 hours, information or a communication link in relation to the six stipulated prohibited categories of content as and when a complaint arises.
- There is also major criticism against the government’s institution of the three-member Grievance Appellate Committees (GAC), which will hear user complaints about the decisions of SMIs regarding their content-related issues and have the power to reverse those decisions.
- The CCIA argues that instead of taking this “opaque” approach, the law could be strengthened by “proactively supporting cross-border data flows through certifications, standard contractual clauses and binding corporate rules”.
Conclusion
- India, with more than 759 million active internet users representing more than 50% of its population is a gold mine for data. The country is also planning to become a hub for data processing, wanting to host data centres and cloud service providers. This means that India’s policy on the flow of data across borders will impact the same on a global level, as was seen with the European Union’s landmark General Data Protection Regulation (GDPR).
Editorial 2: A model for quality and inclusive education
Introduction
- The National Institutional Ranking Framework (NIRF), adopted by the Ministry of Education to rank institutions of higher education in India, shows a noteworthy feature of Tamil Nadu. Specifically, the 2023 NIRF ranking of the top 100 colleges in India reveals the consistent success of Tamil Nadu in providing higher education that is both of good quality and inclusive. The Tamil Nadu experience, in congruence with the State’s motto of development with social justice, offers an important insight for other States.
National Institutional Ranking Framework (NIRF)
- The NIRF employs a ranking metric comprising five parameters with varying weightage to assess the quality of colleges: Teaching, Learning and Resources (40%), Graduation Outcome (25%), Research and Professional Practices (15%), Outreach and Inclusivity (10%) and Perception (10%).
- Each of these parameters has several components, which again have varying weightage. Though far from perfect, the metric is reasonably robust as it uses broad-based and curated parameters.
- The number of colleges participating in the NIRF ranking has grown from 535 in 2017 to 2,746 in 2023.
- This five-fold increase notwithstanding, the participating colleges constitute only a paltry proportion of the actual number of colleges in India.
- Since NIRF ranking has already gained wide traction and credibility, it is likely that many good-quality colleges participate in the exercise.
- A place in the top 100 would bring them repute and increase demand for admission. On the contrary, the non-participating colleges are likely to be poor in quality and seriously lacking in most of the parameters of the ranking metric.
- Therefore, it is reasonable to assume that many good-quality colleges participate in the ranking.
Share of colleges
- Of the top 100 NIRF-ranked colleges in 2023, Tamil Nadu has the largest share (35). Delhi (32) comes next, followed by Kerala (14) and West Bengal (8).
- These four States collectively contribute to 89% of the top colleges, which speaks volumes about other regions.
- Bigger States such as Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan, and Odisha do not have a single college in the top 100. Even the share of the other southern States is abysmal.
- The share of Tamil Nadu (35%) is more than double the combined share of the other four southern States (17%).
The Tamil Nadu Model
- The NIRF ranking of colleges since 2017 reveals that Tamil Nadu has been consistent as the lead contributor of top-ranking colleges in India.
- Tamil Nadu is one of the most literate states in India. The state's literacy rate is 80.33% in 2011, which is above the national average.
- Chennai accounts for only nine (26%) colleges. Coimbatore, with an equal share, competes with Chennai quite consistently. Tiruchirappalli, with five colleges (14%), is next.
- This broad pattern was seen in other years too. The largest beneficiaries from Chennai, Coimbatore, and Tiruchirappalli are likely to be urban dwellers. Yet, it is also likely that the top-ranked 23 colleges from these three cities, which belong to three different regions, might be equally serving the poor and disadvantaged social groups both from these regions as well as those contiguous to them.
- This is because Tamil Nadu not only has one of the highest reservation quotas, but also has been quite effective in its implementation of the reservation policy.
- Additionally, since more than one-third of the top-ranked colleges are dispersed across places, they not only cater largely to the rural and under-served areas, but also provide an opportunity for quality education for students from poor and disadvantaged social groups who do not have the economic resources and social networks to study in colleges from Chennai, Coimbatore, and Tiruchirappalli.
- Thus, the colleges based out of Chennai in general and other districts in particular promote both quality and inclusion, and thereby contribute to the goal of development with social justice.
Way forward
- Tamil Nadu’s impressive and consistent performance in higher education shows that quality and inclusion can be achieved together and consistently.
- This finding should prompt other southern States, which also have a reasonably inclusive and effective social welfare architecture, to introspect why they lag far behind and inspire them to take action to rectify issues.