WTO panel rules against India on tech tariffs

Industry News | | MIC Customs Solutions |

The WTO has ruled in favor of the EU in a complaint regarding tariffs on technology imports imposed by India.

The World Trade Organization's dispute resolution panel has found against India over its tariffs on the import of IT-related goods, urging New Delhi to drop its duties.

A complaint brought by the EU had raised the issue in 2019, which relates to import taxes on a wide range of tech products. These include tariffs of between 7.5 percent and 20 percent for mobile phones and components, as well as integrated circuits. 

Similar complaints were filed last year by Japan and Taiwan, which argued India has exceeded the maximum tariff rate.

The EU's complaint noted that India is required under WTO rules to apply a zero-duty rate to such products, which also include base stations, static converters and electric cables. 

A ruling by the WTO agreed with this position, finding that New Delhi is in violation of international agreements. It stated: "We recommend that India bring such measures into conformity with its obligations."

It did, however, note that India has already brought some of the challenged tariffs into line with global trading rules since last year. 

Brussels welcomed the decision, stating that the value of EU exports affected by these tariffs amounts to €600 million a year. It added: "While this is already significant, the real impact on European companies, which also export from other countries to India, is considerably higher."

In a tweet, the EU trade department also said that respect for the international rules-based trading system is "vital for a good trade relationship" and called on India to apply a zero-duty rate to the affected products.

However, India has not yet commented on the ruling and does have the right to appeal. If it chooses to take this path, the dispute could end up in legal limbo, as the WTO still does not have a functioning appellate body due to the US' refusal to confirm new judges to the panel.