India to challenge WTO panel report against import levy on select ICT items

WTO

The dispute panel of the World Trade Organisation (WTO) has said the import duties imposed by India on certain informational and technology products violates global trading norms, a decision which New Delhi will challenge at the appellate body of the Geneva-based multilateral organisation.

The ruling followed a dispute filed by the European Union, Japan and Taiwan against these duties in the WTO.

"We recommend that India bring such measures into conformity with its obligations under the GATT 1994," the WTO panel's report said.

The WTO has circulated three panel reports in the cases brought by the European Union, Japan and Chinese Taipei in India -- Tariff Treatment on Certain Goods in the Information and Communications Technology sector.

The EU on April 2, 2019 had challenged the introduction of import duties by India on a wide range of ICT products, for instance, mobile phones and components, base stations, integrated circuits and optical instruments. The duties ranged between 7.5 per cent and 20 per cent.

The European Union had claimed that the measures appear to be inconsistent with certain provisions of the WTO.

On 17th April 2019, Singapore and Chinese Taipei requested to join the consultations. On 18th April 2019, Canada, Japan, Thailand and the United States requested to join the consultations. On 19th April 2019, China requested to join the consultations.

Commerce ministry sources said that India will appeal against this ruling and it will not have any adverse impact on the domestic industry.

The dispute was filed on imposition of import duties by India on certain ICT products, including telephones for cellular networks; machines for reception, conversion and transmission or regeneration of voice, images or other data; and parts of telephone sets.

The panel findings said that with respect to the European Union's claims that India's tariff treatment of certain products is inconsistent with certain provisions of the General Agreement on Tariffs and Trade 1994", we find that India's tariff treatment of certain products...is inconsistent...".

As per the process of resolution of a trade dispute under the WTO's dispute settlement mechanism, after filing a case both the trading partners would engage in consultations for the resolution of the issue. If both sides fail to do so, the complainant can ask WTO to set up a dispute panel to resolve the dispute.

These countries had alleged that imposition of import duties on these products by India infringes WTO norms as India has committed zero per cent bound tariffs on these products.

According to the EU, in its panel ruling, the WTO upheld all EU claims against India and found that India's tariffs of up to 20 per cent on certain ICT products, such as mobile phones, were not in line with its WTO commitments, and thus are illegal.

The amount of EU exports of such technology affected by India's violations is up to 600 million euros annually, it said in a statement.

India has since 2014 gradually introduced customs duties of up to 20 per cent on products such as mobile phones, mobile phone components and accessories, line telephone handsets, base stations, static converters or electric wires and cables, it added.

The Geneva-based 164 member multi-lateral body deals with global exports and import-related norms. Besides, it adjudicates trade disputes between the member countries.