WTO panel rules against India’s import duty on certain ICT products

The dispute panel of the World Trade Organisation (WTO) has said some of the import duties imposed by India on certain information and communication technology (ICT) products violate global trading rules. The ruling came in the favour of the EU, which challenged India's tariff on certain products. India is yet to issue an official statement on the matter, though reports suggest the government will challenge the WTO ruling and that it’ll not have any adverse impact on the industries in India.

In its panel ruling, the WTO upheld claims against India and found that India's tariffs of up to 20% on certain ICT products, such as mobile phones, were not in line with its WTO commitments, and thus are "inconsistent".

"India's WTO Schedule continues to be inconsistent with Articles II:1(a) and (b) of the GATT 1994, we recommend that India bring such measures into conformity with its obligations under the GATT 1994," the WTO ruling stated.

The WTO panel said such products were "subject to ordinary customs duties in excess of those set forth and provided in India's WTO Schedule, unless they satisfied certain conditions not set forth in that WTO Schedule".

The world trade body has circulated three-panel reports after EU, Japan and Chinese Taipei brought up the cases against India.

As per a statement by the European Union, India's tariffs could not be justified by any of the reasons India brought forward in this case. "India could not invoke the Information and Technology Agreement (ITA) to escape the commitments made in its WTO schedule, nor limit its zero-duty commitment to products that existed at the time of this commitment and exclude more recent technological products falling under the same tariff line."

The EU said the panel confirmed that "no mistake was committed when determining India's tariff commitments, including when the tariff lines nomenclatures were updated and refused to examine India's request to rectify its tariff commitments". Such changes would need to be negotiated among WTO Members, it said.

Notably, the EU had alleged that the amount of EU exports of such technology affected by India's violations is up to €600 million annually. "While this is already significant, the real impact on European companies, which also export from other countries to India, is considerably higher," it had said.

It was alleged that India has since 2014 gradually introduced customs duties of up to 20% on products such as mobile phones, mobile phone components and accessories, line telephone handsets, base stations, static converters or electric wires and cables. These duties, as per the EU, were in direct breach of WTO rules since India is obliged under its WTO commitments to apply a zero-duty rate to such products.

In this regard, the EU had initiated this WTO dispute settlement case in 2019, and the panel issued its final report to all WTO Members on 17 April 2023. Japan and Taiwan had also filed parallel cases in 2019 following EU's initiative. The WTO may soon announce its decision on these cases as well.