India, European Union Want Mutually Agreeable Solution Over ICT Tariffs

The matter was also discussed at the sidelines of the Trade and Technology Council meeting in Brussels.

· “Before India appeals, the EU wants to have a specific nature of engagement regarding the extent of injury caused to it (due to the IT tariffs imposed by India), and whether there is a way to straighten this out. However, any solution, if proposed (and eventually offered) will have to be WTO-compliant,” sources said.

· New Delhi also believes that the EU has not been significantly affected by Indian tariffs since the inbound shipments of such products, including mobile phones and telephone handsets, from the trade bloc aren’t high. Moreover, the higher duties were mainly imposed to safeguard the domestic industry from cheap Chinese imports.

· On the other hand, the EU has claimed that up to €600 million of its technology exports to India were adversely impacted annually due to New Delhi’s imposition of tariffs on such products. If talks fail, both sides may explore joint deferment where India may postpone its appeal against the ruling or the EU may defer the adoption of the WTO dispute settlement panel’s report.

India and the European Union (EU) are looking at a mutually agreeable solution to the dispute over tariffs on information communications technology (ICT) products imposed by New Delhi.

The WTO’s dispute settlement body in April had ruled that India violated its zero-tariff commitment under the Information Technology Agreement enforced by the multilateral trade body after three similar but separate disputes were raised by the EU, Japan, and Chinese Taipei.

New Delhi had said it would appeal against the judgment, although it would be an ‘appeal into the void’ since the appellate body is currently dysfunctional and the ruling would not have any substantial impact on India.

“Before India appeals, the EU wants to have a specific nature of engagement regarding the extent of injury caused to it (due to the IT tariffs imposed by India), and whether there is a way to straighten this out. However, any solution, if proposed (and eventually offered) will have to be WTO-compliant,” sources said.

The matter was also discussed at the sidelines of the Trade and Technology Council meeting where commerce minister Piyush Goyal had defended India’s IT tariffs and said that they are misconstrued as high.

New Delhi also believes that the EU has not been significantly affected by Indian tariffs since the inbound shipments of such products, including mobile phones and telephone handsets, from the trade bloc aren’t high. Moreover, the higher duties were mainly imposed to safeguard the domestic industry from cheap Chinese imports.

On the other hand, the EU has claimed that up to €600 million of its technology exports to India were adversely impacted annually due to New Delhi’s imposition of tariffs on such products. If talks fail, both sides may explore joint deferment where India may postpone its appeal against the ruling or the EU may defer the adoption of the WTO dispute settlement panel’s report.

According to WTO rules, both parties have 60 days to file an adoption of the panel report and the right to appeal against the ruling after the dispute settlement body takes a decision unless there is a consensus among countries to not adopt or defer the report.

In this case, India has time until June 16 to appeal against the ruling. Last week, India appealed against the order on the dispute, but only with Japan. In the case of Chinese Taipei, the time to appeal has been deferred by 90 days, the report said.