WTO ICT dispute: India prepares detailed appeal, rejects EU’s alternative settlement offer

India has prepared detailed arguments as part of the appeal it will file at the World Trade Organization (WTO) to challenge a ruling which said that its import dues on certain information and technology products violate global trade norms. A WTO panel on Monday ruled in favour of the EU, Japan and Taiwan on import duty on mobile phones and base stations, among others.

Officials said that New Delhi has also rejected the EU’s offer to resolve the issue through a Multi-Party Interim Appeal Arbitration Arrangement (MPIA), which is an alternative system to resolve WTO disputes.

“Many times countries file one-line appeals but we will make a detailed argument on similar grounds as in the dispute,” said an official.

The panel has rejected India’s arguments on technical grounds and but officials said that the interpretation is not correct.

The complainants had said that the tariffs were against the principles agreed upon by India under Information Technology Agreement (ITA) while India argued that at the time of signing the agreement, products such as smartphones did not exist and not defined in the pact and hence, it was not bound to eliminate tariffs on such items.

“Industry feels that there will be no impact of the ruling on domestic manufacturing and exports. The ITA-1 was not a well thought of agreement and it has no provision to be reviewed. Hence, similar issues will keep coming up and other countries could even argue that drones and semiconductor chips are part of the pact,” said an industry representative.

As per the representative, India can’t withdraw these duties now because supply chains have begun shifting away from China towards India and zero-duty imports would hurt domestic manufacturing.“We have 60 days to file our appeal. Our appeal is ready and we are streamlining it,” the official added.

The EU, Japan and Taiwan had claimed that India was applying duties on imports of certain ICT products in excess of the zero-bound duty rate set out in India’s WTO Schedule.
New Delhi has maintained that most of the items identified were not covered under the Information Technology Agreement as these did not exist in 1996 and the tariff lines were not included in the pact.

On the EU reaching out to resolve the issue
through MPIA, the official said: “It is our principled stand to not go to MPIA”.

Recently, China and Japan announced settling a dispute on anti-dumping measures on stainless steel products through MPIA.