WTO Dispute Over India's Information And Communications Technology Tariffs: Panel Ruling And Ongoing Implications1
Background
In 2014, India began imposing custom duties on the import of information and communications technology products, including smartphones, routers, static converters, base stations, and other telecommunications equipment. In April 2019, the European Union filed a complaint alleging that that the duties imposed exceeded the rates that India was obliged to apply under the WTO's Schedule.
In June 2020, a WTO panel was constituted to adjudicate the complaint. India defended the duties, arguing that it was not obliged to adhere to the WTO rates and that certain aspects of the WTO Schedule were invalid. India also claimed that the Schedule did not specifically name the products in question.
The Panel's Ruling
In April 2023, the Panel ruled against India, finding that the duties on these products were inconsistent with India's WTO commitments. India was, accordingly, required to remove or reduce these duties.
Aftermath
On 19 September 2023, the deadline for adopting or appealing the panel report was extended to 18 December 2023. On 8 December 2023, India appealed to the non-functional WTO Appellate Body, blocking the expedited resolution of the dispute as any adjudication would only be possible after the constitution of the WTO Appellate Body that has remained non-operational since April 2020. Consequently, the EU launched a consultation on 28 November 2024 to assess the economic impact of India's tariffs.
Conclusion
While the WTO Panel found India's duties in violation of its WTO obligations, the dispute remains unresolved due to India's appeal to the Appellate Body. With no agreement on alternative resolution methods, the EU is considering using its Enforcement Regulation to ensure compliance.
India could be facing an escalation of tariffs between India and the EU which could prejudice Indian exports. It is a complex situation where the duties are a way for the Indian government to protect the Indian market from cheaper imports of technological equipment which not only pose a threat to local manufacturers but may also pose a threat to strategic interests.
This situation also underscores broader challenges within the WTO, particularly the dysfunction of the Appellate Body, which hampers effective dispute resolution and creates uncertainty in global trade.
This article is not legal advice. The circumstances of each case differ and legal advice specific to an individual case should always be sought. For further information on this topic please contact Tuli & Co: lawyers@tuli.co.in
Footnote
1. WT/DS582/R
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