New Delhi: Ministers from various nations will meet in Abu Dhabi on February 26 to discuss various trade-related issues, including a decision on whether to extend a moratorium in place since 1998 on applying duties on electronic transmissions.
The moratorium restricts countries from applying customs duties on electronic transmissions. As mentioned earlier, since 1998, WTO members have periodically agreed to extend the moratorium on the imposition of customs duties on electronic transmissions.
Developing countries like India oppose this extension, fearing revenue loss. If no agreement is made, the moratorium would expire this year, the report said.
The World Semiconductor Council, in a letter to Prime Minister Narendra Modi, has said that if the moratorium ends, tariffs on digital commerce and chip design data transfers could spike, impacting the semiconductor industry. They have urged India to support a permanent ban on customs duties for cross-border digital transactions, Reuters reported.
The Council has also warned that India’s stance will stifle its own chip design industry.
The Council represents chip giants like Intel, Qualcomm and Nvidia.
Also read: Why WTO Is Not an Appropriate Forum for Negotiating E-commerce Rule
Earlier this week, the Hindu BusinessLine quoted an official as saying that India is unlikely to extend the moratorium on the imposition of customs duties on electronic transmissions at the WTO’s 13th Ministerial Conference (MC13), as there is no consensus on its scope and it benefited mostly developed nations.
“New Delhi is not in favour of a further extension of the e-commerce moratorium. We are unlikely to do so at MC13. Those who demand the moratorium should tell us what its scope is and what all it covers. Only then we can decide if there is a need,” an official close to the negotiations told the business daily.
As per a 2017 UNCTAD study, developing countries lose an estimated $10 billion every year in revenue because of the moratorium. For India, it could be over $500 million every year.
India argues that digital services, once physical goods like books and videos, should now be subject to duties, emphasising the revenue loss faced by developing nations.
However, the Council, in its letter, urged India to work toward a WTO agreement to permanently prohibit countries from subjecting cross-border data and digital tools to customs duties and procedures.
