WTO Panel Ruling against India in ICT tariff dispute
The dispute settlement panel of the World Trade Organization (WTO) has ruled that India’s imposition of tariffs on mobile phones and electronic components violates its commitment under the Information Technology (IT) Act under the multilateral trade body. We recommend India bring such measures into conformity with its obligations under the General Agreement on Tariffs and Trade 1994.
The rulings in three separate but similar disputes raised by the European Union (EU), Chinese Taipei, and Japan will put pressure on India to withdraw the tariffs at a time it is seeking to be a leader in electronics manufacturing through a production-linked incentive scheme.
However, an Indian commerce ministry official said since the appellate body of WTO — its highest adjudicating authority — is dysfunctional due to the absence of judges, the adverse report of the dispute settlement panel will not have any immediate impact.
Many countries had complained that the imposition of tariffs on IT products by India was against the principles agreed upon under ITA. However, India argued that at the time of signing the ITA, products such as smartphones did not exist and hence, it was not bound to eliminate tariffs on such items.
