Restrictions on laptops and computers is a tax on doing business in India, sends mixed signals: US Envoy

US Ambassador to India Eric Garcetti has said that both New Delhi and Washington need to work towards a frictionless trade partnership. The Ambassador emphasised that this was his key vision for India-US business ties.

"India and the US need to build a frictionless relationship for the future where goods and services move freely between the countries. This is important for India to emerge as a big global supplier. Free and frictionless movement of goods and services should be the rule and not the exception", said Garcetti in an interview to CNBC-TV18.

This comes at a time when India has imposed import restrictions and licence requirements on the import of laptops, computers & servers. US companies and industry chambers have written to the Indian government to reconsider the move.

The US Ambassador confirmed that the federal government is engaging with India to understand the purpose of the recent import restrictions on Information and Communications Technology (ICT) products.

"Licence requirements for importing computers and laptops becomes tax on companies wanting to set up offices and manufacturing in India. US companies are saying that restrictions on ICT products sends mixed signals as this is a tax on doing business in India", said the envoy.

The Indian government has been closely engaging with Elon Musk led-Tesla to encourage them to set up an electric car manufacturing plant in India and begin sales of its electric cars. Garcetti said that Tesla is asking for an ecosystem which supports not just them, but all electric car makers interested in India.

"You cannot just mandate companies and need to allow companies to make some money in the first three years to justify the investment", he said. According to reports, the Indian government is considering lowering import duties on some electric cars from 100 percent to less than 20 percent.

The Ambassador also said that the upcoming visit of President Joe Biden will celebrate the India-US partnership and the Indo-US leadership of the world. The visit will focus on bilateral engagement on health, economy, strategic defence, climate and women's empowerment.

At the G20 summit, Garcetti said that while there could be no communique without a strong condemnation of the Ukraine-Russia war, the differences would not hold back progress in other areas.

"Differences on the war will not impact the ability to talk about food, debt, health, climate crisis and infrastructure. High priority for the US will be to ensure a free and open Indo-Pacific, ensuring the global economic system works for everyone and to ensure rules matter", he said.