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India’s data transfer policy concerns chip giants ahead of WTO meeting

A global consortium of semiconductor industry groups has asked India to reconsider its plan to push for duties on cross-border digital e-commerce and data transfers at an upcoming global trade meeting, warning that India’s stance will stifle its own chip design industry.

Ministers from across the globe are convening for a World Trade Organization meeting in Abu Dhabi early next week to try to discuss several trade-related issues, including extending a moratorium in place since 1998 on applying duties on electronic transmissions.

Developing nations like India, South Africa and Indonesia are set to oppose efforts by U.S. and Europe to extend the moratorium. If no agreement is made, the moratorium would expire this year.

The moratorium collapse would mean tariffs on digital e-commerce and an innumerable number of transfers of chip design data across countries, raising costs and worsening chip shortages, the World Semiconductor Council (WSC) wrote to Indian Prime Minister Narendra Modi on Thursday.

The chips sector is a key plank of Modi’s agenda to push India’s economic growth, with a $10 billion incentive package in place to boost the Industry.

Duties on data transfers would ” also impede India’s efforts to advance its semiconductor industry and attract semiconductor investment, especially as more than 20% of the world’s semiconductor design workforce is based in India,” the group wrote in the letter, a copy of which was reviewed by Reuters. Reuters

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