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India’s challenge of a WTO panel’s ruling against import duties imposed by the country on certain ICT products, including smartphones, in a case initiated by the EU has bought it sometime as the WTO Appellate Body is dysfunctional because of non-appointment of members and the appeal is “in void”, officials have said.
New Delhi was unable to reach a mutually agreeable solution (MAS) with Brussels on the WTO dispute as an overall roll back in import tariffs on the items would hurt the country’s PLI scheme and giving concessions to the bloc would go against WTO rules.
“There is at the moment no Appellate Body at the WTO so all appeals are in void. It gives you time. This is a good strategy for India,” an official said.
India approached the Appellate Body only after it could not arrive at a MAS with the EU, another official explained.
“India and the EU have negotiated to arrive at a MAS for the past seven months, but the EU has now filed for adoption of panel report on December 7 and therefore, India has appealed against it on December 8 in the WTO,” explained Peeyush Kumar, Additional Secretary, Commerce Ministry.
The EU had sought customs duty concessions on certain ICT goods as part of the MAS which was not acceptable to India as it violated WTO rules and it could be given only as part of a free trade pact, Kumar explained.
Since India had started attracting investments in the manufacturing of some of the ICT items, such as mobile phones, as part of its PLI scheme, giving import duty concessions would affect the scheme adversely, the official further said.
The EU, Japan and Chinese Taipei had appealed to the WTO against import duties of up to 20 per cent, progressively imposed by India on certain ICT products, such as mobile phones and accessories and base stations, since 2014. As India had committed to zero duties on many ICT products under WTO’s IT Agreement, they said the country had breached its commitments.
On April 17, 2023, the dispute settlement panel of the WTO ruled against India’s duties in three separate judgements. While India appealed against the ruling related to Japan’s case at the Appellate Body, it agreed to have discussions with the EU and Chinese Taipei for a MAS.
India is still in talks with Chinese Taipei for a solution to the dispute, officials said.
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