Indian multinationals absent from digital policy discussions

There are those who say that India’s digital economy has operated in a regulatory vacuum. A more appropriate formulation might be that of a regulatory rollercoaster. In 2022 itself, the Ministry of Electronics and Information Technology (MeitY) announced the Draft IT Rules Amendment 2021 (June 2022), India’s Draft Data Accessibility and Usage Policy (February 2022), National Data Governance Framework Policy (May 2022) and New Cybersecurity Guidelines (April 2022). Also, the most anticipated and critical e-commerce policy and data protection bill, both of which have been in the works for at least a few years now, are expected to be announced soon. This hyperactivity signals the accelerated growth of the digital ecosystem that needs to be regulated. Whether the political decision makers like it or not, all these proposals have been submitted for consultation. In fact, the government recently invited stakeholders to an open house discussion on proposed changes to the IT rules. This piece, however, is about those who are missing from these discussions.

The growing power and influence of internet giants has generated a huge backlash. They certainly bring benefits to consumers, businesses and governments, but they also enjoy dominance, breed misinformation and, in the extreme, undermine democratic processes. Governments have been pressured to respond to myriad aspects of the digital economy – from financial sector regulation to anti-trust to data privacy. With so much at stake, Big Tech platforms have stepped up their advocacy by hiring skilled professionals and funding empirical research, not only in India but across the globe. A skeptic would see this as just another way to influence government. The balance is somewhere in the middle. But I digress. The fact is that Google, Amazon, Facebook, Twitter and others are all actively engaged in political discussions, either directly or through third parties to make a point. Similarly, start-ups, think tanks, civil society organizations and academics involved in the challenges of the digital economy either as users or as observers contribute to the political discourse. So who is missing?

Multinationals of Indian origin — Tatas, Reliance, Aditya Birla Group, Godrej, ITC, Bajaj and Hero — have collectively contributed to the development of the country. They cover infrastructure, appliances and consumer electronics, automobiles, food processing, fashion, pharmaceuticals and energy. While not the quintessential digital companies, with the exception of Reliance Jio, many are striving to embrace digital technologies for manufacturing, distribution and customer service. Although it is difficult to predict when the Indian industry will go digital, it is almost certain that it will. Many companies now have online distribution channels that sell through intermediary platforms or their own websites. The Tatas have embarked on e-commerce, first with Tata Cliq and recently with Neu. Others will follow. If so, one wonders why they are away from conversations about these historic policies that will determine the future of Indian trade. Reports have cited the group as acknowledging data governance as one of its biggest challenges. The question is also at the center of the current political debate. Tata is not alone in meeting the challenges of data integration between group companies. But most of them remained silent.

Government relations and outreach functions have always been important for large corporations. The Indian behemoths that pushed back the opening of the economy after the implementation of the new order in 1991, became popular as the Bombay Club. The government heeded their call and the opportunities for foreign companies remained diluted to allow Indian companies to compete in the domestic market. Although this is a separate debate, some fear that the advocacy of inward-looking protectionist policies in recent times could rekindle such opposition – a Bombay Club 2.0 version. When and how multinationals interact with government will of course vary. Using an industry-specific example, all telecom companies in India engage with commitment in TRAI’s open days, industry deliberations and written submissions so that they can push decision-makers towards decision-making that is conducive to industry, which fits well with overall growth objectives. With regard to general concerns such as infrastructure and the ease of doing business, industry intervention is much more indirect and often an ex post phenomenon, i.e. after policy has been announced. To be fair, it’s also because the government doesn’t always consult companies before announcing a new policy or regulation.

The case of the digital economy is different. The practice of multipartyism in policy formulation is present in the letter, if not always in the spirit. There are multiple opportunities and avenues for engaging in the dialogue, even if the final policy document is the same as the first draft. Big Tech’s policy teams are making maximum use of these channels to present their views and hope for reconciliation on the issues, with the final policy document attempting to strike a balance between corporate viability and government goals. In recent years of active debates on critical digital policies, including those on data governance, privacy, anti-trust and intermediary liability, there has been an overwhelming presence of Indian start-ups Big Tech competing in this space, along with their affiliated associations. Indian multinationals, for unclear reasons, were mostly absent. This has resulted in a disproportionate political focus on controlling Big Tech versus creating an enabling, secure and trusted digital ecosystem in India. As many of the issues highlighted by Big Tech are likely to be pain points for Indian companies as well, the involvement of Indian multinationals could solve the “us versus them” problem that plagues policy-making in India today. today.

The author is Senior Fellow, ICRIER. Views are personal

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