Information and Communication Technology (ICT) The ongoing dispute between the European Union and India in the World Trade Organization regarding products is increasing. The Government of India is very strict about the decision of the World Trade Organization, which came in protest against the import duty imposed by India on many ICT products.
Amid continuing tensions between the Indian government and the European Union following the World Trade Organisation’s decision, a senior official has said that India will retaliate if the trade bloc decides to impose Europe’s domestic law in lieu of import duties on India. Can do.
A spokesperson of the European Union has said that if India does not follow the decision of the World Trade Organization, then the European Union can also impose duty on Indian goods.
Earlier, India had talked about challenging this decision. A week after the WTO decision, India’s Ministry of Commerce issued a statement saying that India is taking necessary steps to challenge the decision. But due to the shortage of judges, the supreme judicial authority of WTO is not functioning at present.
Enforcing EU domestic law violates principles: official
Talking to the English newspaper ‘Business Standard’, the official said, “According to India, implementing domestic law on behalf of the European Union would be a violation of WTO principles. Because implementing domestic law is not in line with the rules of the global trade body.” In such a situation, India can complain about this to the World Trade Organization and can retaliate by imposing duty on imports from the European Union.
He further added, “The EU’s domestic law is not consistent with the WTO rules in the international judicial system. The EU may have its own law, but it has never been used. So it remains to be seen whether Will they apply domestic law in India’s affairs or not? But it is clear that if the European Union violates WTO rules, India can retaliate. However, India believes that the spirit of such retaliation It would be detrimental to the business of both the parties.
What is the dispute between India and the European Union regarding ICT?
In fact, India had decided to impose import duties on several products of Information and Communication Technology (ICT), including mobile phones and its components, circuits and optical devices. This fee ranges from 7.5 per cent to 20 per cent.
The European Union, Japan and Taiwan allege that the tax imposed by the Indian government on some ICT products violates the rules of global trade. In April 2019, the European Union challenged India’s decision in the WTO. A panel of the World Trade Organization on Monday ruled in favor of the European Union, Japan and Taiwan.
On this decision of the World Trade Organization, India says that the interpretation of the panel is not correct. Apart from this, India has also rejected the proposal of the European Union to resolve the issue through the Multi-Party Interim Appeal Arbitration Mechanism (MPIA). MPIA is also an alternative method of resolving trade related disputes.
What is the complaint of European Union and Japan
In the complaint made to the World Trade Organization by the European Union, Japan and Taiwan, it has been said that the tax imposed on some ICT products by India is against the Information Technology Agreement. In addition, these countries have claimed that India charges tariffs on imports of certain ICT products in excess of the zero-customs rate prescribed under the WTO schedule.
At the same time, India says that at the time this agreement was signed. At that time there were no products like smartphones, nor was there any mention of it anywhere in the agreement. Therefore India is not bound to abolish these taxes. Indian officials say that most of the items included in the tariffs are not mentioned in the information technology agreement. Because this agreement was done in 1996 and at that time many of these things were not present.
What is Information Technology Agreement (ITA) Agreement
Information Technology Agreement (ITA) is a multilateral agreement. India signed this agreement in 1996. The World Trade Organization gave it dimension and this agreement came into force on 1 July 1997. The World Trade Organization itself monitors its implementation.
Under this agreement, products like mobile phones are to be exempted from tariff duty. However, after the 2007–08 Union Budget, India imposed taxes on select electronic items to prevent cheap electronic imports from China and promote domestic production.
what the experts say
Industry officials say that it will have no impact on domestic manufacturing and exports. At the time the ITA agreement was made, it was not well thought out. While there is no provision for making changes in this agreement. So these kinds of issues will keep coming up and other countries will keep arguing that drones and semiconductor chips are part of the deal.
According to another industry representative, it would be difficult for India to roll back these tariffs. Because the supply chain is now shifting from China to India. Apart from this, import at zero duty will cause great harm to domestic manufacturing.
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