India stressed on the need for “re-examination’’ of the implications of the moratorium on customs duties on electronic transmissions, particularly for the developing countries and the LDCs, at the working session on work programme on e-commerce at the 13th WTO Ministerial Conference (MC13) in Abu Dhabi on Thursday.

New Delhi had earlier indicated that it was not in favour of extending the moratorium at WTO MC13 as it believed that it resulted in considerable revenue loss for developing nations and there was no consensus on the scope of its coverage. “India reiterated that with the digital revolution still unfolding and with increasing diffusion of technologies such as additive manufacturing and 3D printing, data analytics, Artificial Intelligence, Internet-of-Things etc., there was a need for re-examination of the implications of the moratorium on customs duties on electronic transmissions, particularly for the developing countries and the LDCs,” per a statement issued by the Commerce Department on Thursday.

WTO members had decided in 1998 not to impose customs duties on electronic transmissions  and the moratorium had since been periodically extended at successive ministerial conferences (MC). If the scope of the moratorium is restricted to “transmission”, it is technologically feasible today to impose duties on content and the impact of the moratorium will be of a limited nature, India and South Africa had pointed out in a joint submission.

Loss of $10b

However, if the scope of the moratorium included digitised and digitisable goods, the literature identifies a list which includes cinematograph film; books, pamphlets, maps; newspapers, journals and periodicals; postcards, personal greeting message or announcement cards; other printed matter; video games; computer software; musical records, tapes and other sound or similar recordings; and other recorded media. “More importantly, this list will expand as the digital economy grows. Thus, its implications are very serious,” the submission noted.

Developing countries lose an estimated $10 billion every year in revenue losses because of the moratorium, per calculations made by the UNCTAD in a 2017 study. For India, it could be over $500 million every year (2017 estimate). Developed countries, including the US, Australia, the EU and Japan, however, are pressing for extension of the moratorium.

At the meeting, India said that developing countries needed to focus on improving their domestic physical and digital infrastructure, creating supportive policy and regulatory frameworks, and developing digital capabilities. “India’s own digital transformation is powered by its unshakeable belief in innovation and its commitment to speedy implementation,” it said.

A decision on the moratorium is likely by the end of the MC13 which is expected to conclude at midnight on Thursday, and may extend to the early hours of Friday.

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