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Business News/ Economy / India moves WTO dispute panel over ICT import duties
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India moves WTO dispute panel over ICT import duties

Notably, the tribunal hasn’t been functional for nearly two years due to America’s blockage on appointment of judges. And with the appeal, the matter is likely to prolong.

 In 2019, the EU challenged Indian import duties on ICT products. (AFP)Premium
In 2019, the EU challenged Indian import duties on ICT products. (AFP)

New Delhi: India has moved the World Trade Organization’s (WTO) apex dispute resolution body, the Appellate Body, against a WTO panel ruling that said its import duties on some information and technology products are inconsistent with global trade norms.

Arguing that the panel committed legal errors in interpretation of the trade norms, India asked the tribunal to “reverse, modify, or declare moot and of no legal effect, the findings, conclusions, rulings and recommendations of the panel".

Notably, the tribunal hasn’t been functional for nearly two years due to America’s blockage on appointment of judges. And with the appeal, the matter is likely to prolong.

Earlier, commerce minister Piyush Goyal said developed countries have been inadvertently impacted by some Indian tariffs. Without naming China, he said New Delhi has kept tariffs high on several products to compete with certain “non-transparent“ geographies.

In a 17 April report, the WTO’s dispute panel said import duties imposed by India on certain information and technology products violate global trade norms. This followed a dispute filed by the European Union (EU), Japan and Taiwan against these duties in WTO. The appeal was filed by India in the WTO’s Appellate Body, the final authority on trade disputes.

“The panel’s decision proceeds on the basis that India already had notice of expansion of tariff lines under its schedule, and thereafter India contributed through its inaction during the transposition process. As such, the legal standard to determine whether a member state contributed by its conduct cannot proceed on the basis that it already had notice of the error. These standards are different and the panel made a legal error in presuming that India already had notice of the error and notice is, in fact, essential before contribution through conduct is determined," India told the WTO.

The EU on 2 April, 2019 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.

Mint earlier reported that India will retaliate against a EU law that allows it to suspend concessions and impose trade restrictions if the law is invoked in response to an Indian appeal against a ruling on ICT tariffs at the WTO’s dispute settlement.

Meanwhile, the Indian government estimates that the WTO panel’s report will have little impact on India’s ICT products as the EU’s share of total Indian imports of ICT products in 2022 was 3.03% or $550 million.

Moreover, India has brought its duty rates to nil with respect to two of the contested products, namely, headphones/earphones and electric convertors, since February 2022.

A government official had earlier told Mint that even if the final arbiter on such trade disputes starts working from now, it would years to issue a ruling on the issue and therefore the production linked incentive would not be impacted.

According to trade experts, if the appellate body also passes a ruling against India’s support measures, New Delhi will have to abide by that and make appropriate changes in the way it provides these measures.

Last year, India had appealed against a ruling of WTO’s trade dispute settlement panel which said that the country’s domestic support measures for sugar and sugarcane are inconsistent with global trade norms.

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Published: 26 May 2023, 11:44 PM IST
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