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Frequent run-ins with India govt cloud U.S. tech expansion planning , details

Photo: VAR

Another spat between India’s government and U.S. big tech has exacerbated disillusion among industries which have spent billions to build hubs in their largest growth market, to the extent some are rethinking expansion plans, people close to the matter said.

The government on Saturday said Twitter Inc had not indicated compliance with new rules aimed at making social media firms more accountable to legal requests, and therefore risked losing liability exemptions for content posted on its platform.

Twitter joins compatriots Amazon.com Inc, Facebook Inc and Facebook-owned WhatsApp in long being at loggerheads with the administration of Prime Minister Narendra Modi over data privacy bills and policies some executives have called protectionist, but tension has escalated in recent weeks.

Police visited Twitter last month to notify it of a probe into the tagging of a political tweet as “manipulated media”, and in February interrogated an Amazon official about the potentially adverse social impact of a political drama. Meanwhile, WhatsApp is challenging the government in court over rules it said would force it to access encrypted data.

“The fear is there,” said a senior tech industry executive in India. “It weighs both strategically and operationally.”

There are no indications the increasing run-ins have led to the delay or cancellation of planned investment.

Three senior executives familiar with the thinking of major U.S. tech firms said perceptions of India being an alternative, more accessible growth market to China are changing, and that longstanding plans for India’s role in their operations are being reviewed.

“There always used to be these discussions to make India a hub, but that is being thought through now,” said one of the executives, who works at a U.S. tech firm. “This feeling is across the board.”

Four other executives and advisors also expressed concern about rising tension. All declined to be identified due to the sensitivity of the matter and because discussions were private.