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U.S. technology expansion plans are allegedly overshadowed by frequent conflicts with the Indian government

People familiar with the matter said that another quarrel between the Indian government and major US technology companies has exacerbated the company’s disillusionment. These companies have spent billions of dollars to build hubs in their largest growth markets, so much so that some companies are rethinking expansion plans. .

The government said on Saturday that Twitter did not indicate compliance with new rules designed to make social media companies more accountable to legal requirements, and therefore may lose immunity from liability for content posted on its platform.

Twitter, along with Amazon, Facebook, and Facebook’s WhatsApp, has long quarreled with the government of Indian Prime Minister Narendra Modi over the data privacy bill and policies that some executives call protectionism, but in recent weeks Tensions escalated.

The police visited Twitter last month to inform it to investigate the labeling of political tweets as “manipulated media” and interrogated an Amazon official in February about the possible negative social impact of political dramas. At the same time, WhatsApp is challenging the government in court for what it says will force it to access encrypted data.

“The fear is there,” said a senior technology executive in India. “It is both strategically and operationally important.”

There is no indication that more and more running-in has caused the delay or cancellation of planned investments.

Nonetheless, three senior executives familiar with the ideas of major US technology companies said that India is an alternative and more accessible growth market for China is changing, and they are reviewing long-term plans for India’s role in their business.

An executive working for a US technology company said: “In the past there were always these discussions to make India a hub, but now we are considering this.” “The feeling is comprehensive.”

Four other executives and consultants also expressed concern about the escalation of tensions. Due to the sensitivity of the matter and the discussion was conducted in private, everyone declined to be named.

Twitter, Amazon, Facebook, WhatsApp and the Ministry of Electronics and Information Technology of India did not respond to requests for comment.

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The government argues that rules need to be established to prevent the spread of misinformation that could lead to violence-for example, in 2017, kidnapping rumors shared on messaging apps including WhatsApp led to lynchings. It also stated that these rules are necessary to hold large technology companies accountable for actions that harm domestic companies or compromise customer privacy.

India is a huge market for American technology giants. In terms of the number of users, it is the largest market for Facebook and WhatsApp, and data from Statista shows that Twitter ranks third. Amazon has pledged to invest up to 6.5 billion US dollars (approximately 47,480 crore) in the country.

In order to attract small businesses through WhatsApp, Facebook invested US$5.7 billion (approximately Rs 41,640 crore) in Jio Platforms, Reliance’s media and telecommunications arm, last year.

Alphabet’s Google also injected USD 4.5 billion (approximately Rs 32,880 crore) into Jio from a newly established USD 10 billion (approximately Rs. 73,050 crore) fund last year for investment in India within five to seven years.

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The government tries to strike a balance between attracting high-tech investment and nationalist policies aimed at protecting local businesses and advancing their political agenda.

The border conflict with China prompted it to effectively ban Chinese social media applications including TikTok and WeChat.

The government also forced foreign companies to store data locally to counter fierce lobbying, and its promotion of domestic payment card networks prompted MasterCard to complain to the US government about its use of nationalism.

In 2019, Amazon removed thousands of products from its e-commerce platform due to compliance issues with new regulations. The e-retailer was individually subject to review by the Competition Commission of India due to its retail behavior.

Twitter publicly refused to comply with some of the government’s request to delete content, and some industry executives said that this position may exacerbate its current situation.

WhatsApp has gone to court instead of complying with a new law that requires social media companies to track the source of dangerous or criminal posts on its platform. The messaging app operator said it would not be able to comply if encryption was not broken, while observers said that concessions could trigger similar requirements in other countries.

At the same time, WhatsApp is facing regulatory delays, limiting its payment service to 4% of its 500 million customers. Despite this, it continues to recruit for a service that it calls “globally important” opportunities.

Government officials have little patience with opposition. IT Minister Ravi Shankar Prasad stated that any strong democracy must have accountability mechanisms, such as the ability to identify the originator of a message.

Prasad said in an interview with the Hindu newspaper published on Sunday: “When you deprive users of the right to effective remedial forums, a private company based in the United States should avoid teaching us about democracy.”

Nevertheless, continued confrontation may jeopardize Modi’s ambitions to make India the preferred investment destination.

Another executive familiar with the thinking of American companies said: “This is a question of what you will develop in three to five years.” “Are you doing this in India or in another country. This is where the conversation is.”

© Thomson Reuters 2021

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