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WTO panel rules against India in tech tariffs dispute

Three WTO panels ruled against India on the technology tariff disputes initiated by the European Union, Japan and Chinese Taipei (Taiwan).

The trade body panel maintained that India’s import duties on certain information communication items were not consistent with the General Agreement on Tariffs and Trade of 1994, according to its statement.

Some of the disputed items include electrical transformers; static converters and inductors; telephone sets, including telephones for cellular networks or for other wireless networks; apparatus for the transmission or reception of voice, images or other data—including apparatus for communication in a wired or wireless network.

The WTO panels were constituted as a response to requests raised by the European Union, followed by Japan and Chinese Taipei (Taiwan) in 2019. They claimed that India’s tariff treatment for certain goods in the information and communications technology sector was not in line with previous agreements for concessions.

Countries like Brazil, Canada, China, Indonesia, the Republic of Korea, Norway, Pakistan, the Russian Federation, Singapore, Thailand, Turkey, Ukraine and the U.S. expressed third-party interest in the dispute.

What The WTO Said
The WTO panels concluded that India’s duties have nullified or impaired benefits accruing to the complainant countries under that agreement. “…we recommend that India bring its measures into conformity with its obligations under Articles II: 1(a) and (b) of the GATT 1994.”

The articles provide for exemption from ordinary customs duties, other duties and charges on select imports, which refer to electronics and information technology items in this case.

India will file an appeal regarding the charges against it leading to protracted discussions, according to Sanjay Notani, partner at ELP, who deals with international trade and customs. The panel findings would have an impact in the ongoing FTA negotiations with other countries, particularly the EU, he said.

As part of the proceedings, the WTO rebuffed India’s previous assertions concerning its WTO tariff commitments.

India also raised several arguments on the nature of the conditions attached to certain tariff treatment as well as the tariff classification of certain products.

In its defense, India had maintained that its binding tariff commitments are in accordance to the Information Technology Agreement and that these commitments did not change upon their incorporation into India’s WTO Schedule.

Recently, during her trip to Washington, India’s Finance Minister Nirmala Sitharaman had said that the moratorium on electronic transmissions has continued since 1998 despite evolution into the digital age

“Shouldn’t there be a change in WTO policy in terms of a moratorium? … We don’t have to reverse the benefits of globalisation, but make it more transparent,” she told American Economist Adam Posen, at the Peterson Institute for International Economics ahead of the annual IMF-World Bank meetings. Bloomberg

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