Home / News / World /  India opposes e-transmission moratorium

India reiterated its opposition to a proposal to extend the global moratorium on customs duties on electronic transmission as the ministerial meeting at the World Trade Organization in Geneva meandered to last-minute negotiations in search of a consensus on tricky issues.

Earlier in the day, WTO director general Ngozi Okonjo-Iweala decided to extend the ongoing 12th ministerial conference by a day after the 164 member countries failed to arrive at a consensus on any of the key issues on the table. The will now conclude on Thursday.

Commerce and industry minister Piyush Goyal on Wednesday said the moratorium, in place since 1998, costs developing countries billions of dollars in lost revenue.

On the proposals to reform the WTO, Goyal pressed for retaining the existing special and differential treatment provisions that exempt developing countries from the same strict trade rules and disciplines placed on industrialized countries.

Goyal contested proposals that could result in fundamental changes in the institutional architecture of WTO, “running the risk of skewing the system against the interest of developing countries."

Goyal urged countries to re-invigorate talks on the work programme on e-commerce, by comprehensively examining all trade-related issues relating to global e-commerce, taking into account the economic, financial and development needs of developing countries.

“I think this moratorium that has been continuing for 24 years needs to be reviewed, relooked at. The work program needs to be reinvigorated, and must provide regulatory space for developing countries to provide a level playing field to domestic SMEs in the digital sector while continuing to contribute to their economies," said Goyal during his intervention.

The issue dates back to 1998, when WTO members had agreed not to impose any customs duty on electronic transmission. But, the moratorium has been periodically extended at the ministerial conferences and several countries are seeking to make the moratorium permanent. India is opposed to an extension on grounds that developing countries have been losing revenue. Since digital trade at present is dominated by big tech and developed countries, the moratorium squarely favours the developed nations, India has said.

Goyal told the meeting that between 2017 and 2020, developing countries have lost potential tariff revenue of possibly upward of $50 bn only on import of 49 digital products..

“Is it fair that the cost of the moratorium is almost completely borne by the developing countries for extending duty free quota, quota free market access, largely for a very few players. Can we justify that this wealth accumulated by Big Tech at the cost of the ability of the emerging markets to generate resources, to meet the basic needs of their large population. By the way, by 2025 this revenue loss is estimated to be $30 bn every year. Imagine what public good can be done using these resources," said Goyal.

(The writer is in Geneva on the invitation of the ministry of commerce and industry)

Dilasha Seth
" Dilasha Seth is a journalist reporting on macroeconomic policy for the last 11 years. She writes extensively on issues including international trade, macroeconomic data, fiscal policy, and taxation. At Mint, she reports on trade deals that India is signing besides key policy decisions of the Ministry of Finance. She closely tracked and covered the transition to the goods and services tax (GST) regime in 2017 and also writes on direct tax-related issues. In the past, she has worked with Business Standard and The Economic Times. She is based in Bangalore."
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