India has signalled its intention to use electronic data of its citizens “for its own development rather than allow its value to be appropriated by others", challenging the United States and other Western countries that want to eliminate restrictions on cross-border data flows and storing of data in foreign servers.
Delivering the strongest statement yet on the escalating battle for global electronic commerce at the World Trade Organization, New Delhi made it clear that it is preparing a national e-commerce policy that seeks to “use India’s data for its own development rather than its value to be appropriated by others." New Delhi intends to preserve the policy space for developing a robust domestic e-commerce sector by imposing customs duties on electronic transmissions.
At a closed-door meeting of trade envoys on 3 May, India’s trade envoy J.S. Deepak derided the ongoing efforts by the US and several other countries to undermine multilateral exploratory work on e-commerce so as to craft rules on a plurilateral (limited to two or more countries) framework. Most developing countries, said Ambassador Deepak,“are not ready for binding rules" in electronic commerce."
India wants to “protect domestic industry" by imposing customs duties and “leverage technology for creating jobs and wealth, by ensuring competition and level playing field."
Further, it is imperative “to assess the extent of sacrifice of revenue involved [because of not imposing customs duties on electronic transmissions], and the distribution of this loss among Members, when new technologies like additive manufacturing will result in electronic transmissions cascading and many dutiable goods being manufactured by digital printing," India has argued.
A large majority of countries rallied around India’s stand on the need to develop strong domestic e-commerce industries to bridge the digital trade and digital-dependency, said an African trade envoy, who asked not to be identified. Attempts are being made to craft rules on e-commerce that would perpetuate the global dominance of this sector by few companies, the envoy suggested.
India is hosting an informal trade ministerial summit of developing countries in New Delhi on 13 May to build a strong coalition for pursuing a developmental trade agenda in global trade. “We stand ready to work with other like-minded countries to make specific proposals" on e-commerce, agriculture, fisheries subsidies, and the proposed WTO reforms, the Indian envoy indicated.
As part of a joint initiative on e-commerce, the US has proposed sweeping global rules that call for eliminating restrictions on cross-border data flows, mandatory requirements for storing data in local servers and web services, including cloud-computing among others. In a proposal titled the “WTO Agreement on Digital trade", the US has prescribed that countries shall not impose customs duties on electronic transmissions and digital products. Washington has asked for lifting requirements for sharing source code of software.
Significantly, at a time when Washington appears determined to dismantle the highest adjudicating body for resolving global trade disputes, the Appellate Body, at the WTO, the US wants binding rules for electronic commerce, said an African trade envoy, who asked not to be quoted.
The European Union and Japan are also seeking almost identical global rules for electronic commerce. The US, the EU, Japan, and several other countries remain opposed to the existing multilateral negotiations on electronic commerce at the WTO.