India has blocked a first request from the European Union for the establishment of a dispute panel to rule on tariffs imposed by New Delhi on certain information and communication technology (ICT) goods including mobile phones, cameras, headphones and earphones at the World Trade Organisation (WTO).
The Dispute Settlement Body of the WTO, which met in Geneva on Thursday, allowed India to block EU’s request for a panel as it was made by the bloc for the first time, according to a Geneva-based official.
“If the EU requests for a dispute panel for a second time at the DSB, which it is likely to do soon as the bilateral discussions between the two countries on the matter did not result in a resolution, India will not be able to block it again,” the official said.
As per the EU’s calculations, the dispute with India, which concerns exports of products such as cell phones, telephone handsets and telecommunication wires hit by tariffs of up to 20 per cent, affected exports worth around €400 million a year and related EU jobs. The EU contends that the duties are contrary to the Indian WTO duty-free commitments.
The request for the establishment of a panel in the dispute follows government-to-government formal consultations with India which took place on May 21, 2019.
India levied customs duty on mobile phones and some other ICT items at 10 per cent for the first time in July 2017 and later increased it to 15 per cent that year. Despite protests from a number of WTO members, customs duties on mobiles were further increased to 20 per cent in the following year’s Budget.
In October 2018, India increased the basic customs duty on telecom equipment and imposed duties on printed circuit boards used to make the equipment and several other telecom products.
New Delhi has so far argued that most of the items identified by the EU and others were not covered under the ITA as these did not exist in 1996 and the tariff lines were not included in the pact.