India to oppose WTO freeze on e-com duties

India will strongly oppose continuation of the moratorium on customs duties on e-commerce trade at the World Trade Organisation (WTO)'s meeting in Geneva next month as it was adversely impacting developing countries.

Allowing the moratorium to lapse:

• Important for developing nations to preserve policy space for their digital advancement.
• To regulate imports and generate revenue through customs duties.

About Moratorium

• The WTO members had agreed not to impose customs duties on electronic transmissions since 1998.
• The moratorium has been periodically extended at successive ministerial conferences (MC).
• India and South Africa on several occasions have asked the organisation to revisit the issue.
• In a joint communication submitted to the WTO earlier, both the countries had stated that all the issues on the e-commerce moratorium need to be revisited with ‘the utmost urgency and in its entirety’.
• In 1998, the General Council of the WTO established the work programme on e-commerce to comprehensively examine all trade-related issues pertaining to global e-commerce by taking into account the economic, financial and development needs of emerging economies.
• India wants the Council for Trade in Goods, Council for Trade in Services, Council for TRIPS and Committee for Trade and Development should take up discussions on e-commerce as per their respective mandates originally set.

Impact of Tariff Moratorium

• The potential tariff revenue loss to developing countries is estimated at $10 billion annually.
• India is witnessing an exponential rise in imports of electronic transmissions, mainly of items like movies, music, video games and printed matter.
• Profits and revenues of digital players are rising steadily.
• The ability of governments to check these imports and generate additional tariff revenues is being ‘severely’ limited because of the moratorium on e-commerce.

Exam Track

Prelims Take Away

• WTO and various councils
• TRIPS