The US has sought permission to join Japan’s consultations with India at the World Trade Organization (WTO) on tariffs imposed on cellular phones, base stations and certain other IT and telecom products on the ground that American companies export many of these items to India.
“The US exports to India of goods in the specified tariff items subject to the measures identified in Japan’s request, were valued at approximately $290 million in 2018. Accordingly, the US considers that it has a substantial trade interest and requests to be joined in these consultations,” it said in a representation to the Dispute Settlement Body (DSB) of the WTO.
The US earlier had sought permission to participate in consultations requested by the EU with India on the same matter. It has also been holding bilateral talks with the Ministry of Electronics & IT trying to convince it to roll back the duties on the items ranging between 10 percent and 20 percent.
On May 10, Japan notified to the WTO that it wanted to hold dispute consultations with India over import duties on mobile phones, base stations and routers, as well as the circuit boards and other components that go into these devices.
Japan alleged that duties imposed on these items were against India’s obligations at the WTO of keeping them at zero percent (as part of the IT Agreement signed in 1996).
India levied customs duty on mobile phones and some other ICT items at 10 percent for the first time in July 2017 and later increased it to 15 percent that year. Despite protests from the number of WTO members including the US, the EU and Japan, customs duties on mobiles were further increased to 20 percent in Budget 2018-19.
In October 2018, India increased basic customs duty on several telecom equipment and imposed duties on printed circuit boards used to make the equipment and several other telecom products.
In its defence, New Delhi has been arguing that the identified IT and telecom products on which import duties have been imposed did not exist in the present form when the ITA was signed and hence did not fall in its purview.―The Hindu Business Line