Policy

Pressure on India to lower ICT tariffs eases as WTO panel delays report

Amiti Sen New Delhi | Updated on March 17, 2021

India has the option of appealing to the WTO Appellate Body   -  istock.com/Theerapong28

EU, Japan, Taiwan say India’s ICT import duties violate norms

India will not be under pressure at the World Trade Organisation (WTO) to re-consider its import duties on certain Information Communication and Technology (ICT) products including mobile phones for at least another year as the dispute panels for examining complaints, made against the taxes by some members, have sought more time to submit their reports.

The EU, Japan and Taiwan had asked for the establishment of the panels as they contented that the import duties imposed by India on mobile phones and other ICT products violated WTO norms.

“All three dispute panels constituted last year have informed the Dispute Settlement Body that their reports will not be out within the stipulated six months and may be submitted only in the second quarter of 2022. This means that the pressure would be off India for at least some time,” a Geneva-based trade official told BusinessLine.

‘Unfair tariffs’

The three countries, in their complaints, identified a number of items that they alleged were subjects of unfair tariff treatment in India. Apart from mobile phones, these included base stations, machines for the reception, conversion and transmission or regeneration of voice, images or other data, and parts of telephone sets and other apparatus for the transmission or reception of voice, images or other data.

The complainants argued that the products fell within the scope of items on which India had committed to a bound tariff rate of zero per cent under the IT Agreement (ITA) forged in December 1996. They pointed out that over the last few years India had applied import tariffs, some as high as 20 per cent, on these items, in violation of the ITA.

‘New obligations’

India, on its part, has been stressing that the items were not part of the initial ITA of 1996 and the complaining countries were trying to make it take new obligations under ITA-II which it had not agreed to.

“The dispute panels realised that six months were not enough to finish the work at hand and thus asked for time till the second quarter of 2022 for the reports,” the official said.

In case the dispute panels give their verdict against India, the country has the option of appealing to the WTO Appellate Body which is presently dysfunctional.

Published on March 17, 2021

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