Feedback on GAICT and Recommendation for a Bulk-license for Cryptography

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Feedback on GAICT and Recommendation for a Bulk-license for Cryptography

priyanshi

@priyanshi

December 12, 2023

Public Policy

The government has taken several initiatives to ease compliance requirement under SCOMET, including but not limited to the introduction of the General Authorisation for Intra-Company Transfers (‘GAICT’) policy, further revision of the GAICT policy, conducting several outreach programs on SCOMET for the IT sector, among others. This has positively impacted the compliance landscape of export control regulations in the tech sector. Nasscom has extensively engaged with the industry post implementation of the GAICT policy and has received overall positive feedback.

On December 11, 2023, we submitted recommendations to DGFT to further streamline India's export control compliance regime for the benefit of the industry's ease of doing business. We made two key suggestions on:

Expanding the scope of items eligible for GAICT under Category 8
Introduction of bulk licensing for information security items

Summary of our submission is highlighted below:

Expansion of GAICT Applicability:

Despite benefiting from eased compliance under GAICT, certain items within SCOMET category 8 remain excluded from its applicability. Such exclusion necessitates obtaining individual SCOMET licenses for these specific items, leading to the maintenance of multiple licenses (individual SCOMET and bulk GAICT licenses).

This dual licensing scenario creates additional compliance burden and diminishes the effectiveness of the bulk licensing policy.

We recommend reviewing and considering the inclusion of certain excluded items, that are low-risk and frequently traded, within SCOMET category 8, under the scope of GAICT.

Introduction of Bulk Licensing for Information Security Items:

Information security items, particularly those using cryptography, have broad commercial applications. The current GAICT policy is limited to intra-company transfers, and would not include bulk-licensing for cryptography for third-party transactions. This creates challenges for the Information and Communication Technology (ICT) industry where longer timelines for obtaining licenses in such third-party transactions is a significant cost for industry.

Further, since widely used software often incorporates standard encryption libraries, there is a case for relaxing controls on the export of such information security systems.

Therefore, we recommend bulk licensing policy for cryptographic information security items under SCOMET Category 8A5 Part 2, with certain safeguards like documentation proofs, periodic post-shipment reporting requirements, inapplicability of the bulk license for military or government end-users, to prevent misuse.

For any queries on this, kindly write to us via mail to priyanshi@nasscom.in and garima@nasscom.in with copy to policy@nasscom.in.

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priyanshi

Senior Associate, Public Policy and Government Affairs

Reach out to me for everything data, platforms, or export controls!