EU, China, Thailand join hands against India’s ICT products tariff

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Published: May 23, 2019 2:35:28 PM

Singapore, Canada and Chinese Taipei too have earlier sought to join this dispute consultation against India under the WTO's dispute settlement body.

Singapore, Canada and Chinese Taipei too have earlier sought to join this dispute consultation against India.

The European Union, China, and Thailand have expressed interest to join consultations in a case filed by Japan at the WTO against India’s import duties on certain information and communication technology products, including mobile phones. Singapore, Canada and Chinese Taipei too have earlier sought to join this dispute consultation against India under the WTO’s dispute settlement body.

According to a communication of EU, China, and Thailand to the World Trade Organisation (WTO), these countries claimed that they have a substantial interest in the trade of information and communication technology (ICT) goods and in joining the consultation process. On May 14, Japan dragged India to the WTO over the import duties imposed on certain electronic goods, including telephones for cellular networks, machines for the reception, conversion and transmission or regeneration of voice, images or other data; and parts of telephone sets.

It 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. While bound tariffs or duties refer to the ceiling over which a WTO member country cannot impose import duty, the applied tariff is the duty which is currently in place. In a separate communication, China said that it has a substantial trade interest in the consultations as it is one of the main exporters of information technology products in the world.

“In 2018, China’s export of telephones for cellular networks to India amounted to USD 1.9 billion, base stations amounted to USD 0.23 billion, and machines for the reception, conversion and transmission or regeneration of voice, images or other data amounted to USD 0.28 billion,” it said.

The EU, which has already filed a similar dispute case against in India in the WTO, stated that in light of its substantial trade interest, it desires to join the consultations. Similarly, Thailand claimed that the import duties on these goods by India may “substantially” affect Thailand’s sales and exports of these products. “As a result of this substantial trade interest, Thailand requests that it be permitted to join the consultations in this dispute,” it said.

As per the WTO rules, seeking consultation is the first step of the dispute settlement process. If the bilateral consultations requested by the complainant (in this case Japan) with India do not result in a satisfactory solution, Japan can request the WTO to set up a dispute panel to pass a ruling on the matter. All the countries that are seeking to join the consultations require approval from India and Japan.

A WTO member country can file a dispute if it perceives that another country’s trade policies or actions are violating global trade norms and impacting their trade. European Union, China, and Thailand are key trade partners of India.
In October last year, India hiked import duty on certain communication items, including base stations, to up to 20 per cent as part of efforts to check a widening current account deficit by curbing imports.

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