WTO dispute over India’s tariffs on ICT goods: US seeks setting by up of dispute panel

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Published: September 22, 2019 4:08:56 PM

Several countries including the European Union, Singapore, Canada, China, Taiwan and Thailand have sought to join in the dispute as they have claimed significant trade interest in the ICT products over which India has imposed import duties.

These import duties are therefore in clear breach by India of WTO rules. The levies affect EU exports worth Euro 600 million per year,” the EU had said.

The US has sought establishment of a dispute panel by the World Trade Organization’s (WTO) in a case against India’s import duties on certain ICT products, including mobile phones. The US sought consultations in July under the WTO’s dispute settlement mechanism over imposition of import duties by India on certain information and communication (ICT) products, alleging breach of global trade norms. As both the countries failed to resolve the dispute through the consultation process, the US has sought setting up of the dispute panel. Bilateral consultation is the first step towards resolution of a trade dispute under the WTO norms. “The US held consultations with India on August 1, 2019. Unfortunately, these consultations did not resolve the dispute,” according to a communication of the US to the WTO.

Several countries including the European Union, Singapore, Canada, China, Taiwan and Thailand have sought to join in the dispute as they have claimed significant trade interest in the ICT products over which India has imposed import duties. The EU has challenged introduction of import duties on a wide range of ICT products, for instance, mobile phones and components, base stations, integrated circuits and optical instruments.

Seeking consultation is the first step of dispute settlement process as per the WTO rules. If the consultations requested with the complainant do not result in a satisfactory solution, they can request that the WTO sets up a panel in the case to give ruling on the issue raised. In separate communications to the WTO, these countries have stated that they have substantial trade interest in these consultations as they are major players in the ICT sector.

The US has said that it exports of these goods to India were valued at about USD 490 million in 2018. “Despite its (India) earlier legally binding commitment in the WTO not to charge any duties on these products, India has been applying duties ranging from 7.5 per cent to 20 per cent. These import duties are therefore in clear breach by India of WTO rules. The levies affect EU exports worth Euro 600 million per year,” the EU had said.

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