India is likely to come under more pressure at the World Trade Organization (WTO) to roll back import duties on mobile phones, cameras and certain other products in the information and communication technology (ICT) sector with five countries, including Canada, the US, Thailand, Singapore and Chinese Taipei, seeking permission of the dispute settlement body (DSB) to join the consultations the EU has initiated with New Delhi on the matter.
“We are yet to arrive at a mutually suitable date for consultations with the EU on the matter of duties imposed on ICT products. The number of members who would want to be part of it may go up further as there is a lot of interest in this case. However, we are very clear that India has not violated any rule,” a government official told BusinessLine.
In its request for consultations filed with the DSB earlier this month, the EU alleged that India applied duties on a number of ICT products in excess of the rates it has committed to at the WTO. These items included telephone sets, including telephones for cellular networks or for other wireless networks, transmission apparatus for radio-broadcasting or television, television cameras, digital cameras and video camera recorders and microphones, loudspeakers, headphones and earphones, among others.
The EU pointed out that as per India’s schedule of commitments at the WTO (under the Information Technology Agreement of 1996), New Delhi was supposed to apply zero per cent import duties on the identified items. “The levies affect EU exports worth €600 million per year,” the EU said.
India levied customs duty on mobile phones and some other ICT items at 10 per cent for the first time in July 2017 and later increased it to 15 per cent that year. Despite protests from a number of WTO members, customs duties on mobiles were further increased to 20 per cent in last year’s Budget.
In October 2018, India increased the basic customs duty on telecom equipment and imposed duties on printed circuit boards used to make the equipment and several other telecom products.
Not covered under ITA
New Delhi has so far argued that most of the items identified by the EU and others were not covered under the ITA as these did not exist in 1996 and the tariff lines were not included in the pact. The complainants , however, are not satisfied with the argument. If the consultations between India and the EU do not reach a conclusion, the EU may ask for a panel to settle the dispute.
The US has been putting bilateral pressure on India to remove the import duties since the past year. In its request to the DSB seeking permission to participate in the consultations, the US pointed out that it exported the affected ICT items to India in 2018 worth $490 million and thus has substantial interest in the matter.
Canada, too, pointed out that over 2016-18, it had exported the items identified by the EU in its submission worth $40.2 million to India, the official said.
Thailand said from 2015 to 2017, it was India’s largest supplying market for digital cameras accounting for 34.5 per cent of total imports. It said that in 2018, India imported the identified products worth $318 million from Thailand.
Source: The Hindu