India asks WTO to re-examine moratorium on customs duties on digital goods

WTO's MC13 that began on February 26 will conclude on February 29.

India reiterated her ask to re-examine the implications of the moratorium on customs duties on electronic transmissions, particularly for the developing nations and the least-developed countries (LDCs) at a session on e-commerce during the World Trade Organisation’s (WTO) 13th Ministerial Conference (MC13) on February 28.

New Delhi stressed that currently, a few firms based in developed countries dominate the global landscape of e-commerce creating a huge digital chasm between them and the developing nations. This makes it challenging to increase the participation of developing countries in global e-commerce.

With the digital revolution still unfolding and with the increasing diffusion of technologies such as additive manufacturing and 3D printing, data analytics, Artificial Intelligence, Internet-of-things, developing countries need to focus on improving their domestic physical and digital infrastructure by creating supportive policy and regulatory frameworks.

India has been for long pushing to end a moratorium on customs duties on digital goods citing that such a levy tends to benefit a few developed nations.

New Delhi believes that a country should be free to levy such duties given that developing nations are losing around $10 billion in revenues due to this moratorium. WTO members had agreed not to impose customs duties on digital goods until MC13.

Since 1998, WTO members have periodically agreed to extend the moratorium on the imposition of these customs duties. The last extension was agreed in June 2022 at the WTO's 12th Ministerial Conference. In addition to extending the moratorium until MC13, members, including India, at MC12, agreed to intensify discussions on the scope, definition, and impact of the moratorium.

India is of the view that the country needs to levy customs duties to protect its nascent digital industry. And, since the difference between digital goods and digital services isn't well-defined, New Delhi is not in favour of extending the moratorium further.

WTO's MC13 which began on February 26 will conclude on February 29.