WTO rules India violated global trade rules in IT dispute

WTO finds India breached global trading regulations in IT dispute

The World Trade Organization (WTO) has found that India has breached global trading regulations in a dispute over import duties on IT products with the European Union (EU), Japan, and Taiwan. The WTO panel’s report recommended that India should modify the measures to conform with its obligations. The dispute began in 2019 when the EU objected to India’s introduction of import duties of between 7.5% and 20% on various IT products, including mobile phones, integrated circuits, and components, stating that the tariffs exceeded the maximum rate. Japan and Taiwan also lodged similar complaints that year.

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EU says up to 600 million euros of exports affected by India’s tariffs

The EU is India’s third-largest trading partner, and its exports worth up to 600 million euros ($654.66 million) are directly affected by India’s tariffs on an annual basis, according to Brussels. India’s diplomatic mission in Geneva has not commented on whether it will appeal against the decision. However, if it does, the case will remain in legal limbo as the WTO’s top appeals court is currently not functioning due to the United States opposition to judge appointments.

The WTO panel found that India had already brought some of the tariffs under scrutiny in line with global trading regulations since 2020. While the panel supported the complaints against India, it dismissed one of Japan’s claims that India’s customs notification lacked “predictability”. The EU’s trade department reiterated that a rules-based trading system was necessary for good trade relations, calling the tariffs “illegal” in a tweet.

Implications for India’s IT Industry and Trade Relationships

The ruling has significant implications for India’s IT industry, which is a vital sector of the country’s economy. It remains to be seen whether India will accept the panel’s decision and bring its import duties into line with global trading rules or challenge the ruling.

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