India is unlikely to extend the suspension of tariffs on electronic transmissions at the WTO's 13th Ministerial Conference (MC13) to be held in Abu Dhabi this month, sources said. There was no agreement on its scope, and it benefited most developed countries.
India, with South Africa's support, also plans to oppose efforts by a number of countries, including China, towards a multilateral agreement on investment facilitation for development. This is because this is a non-trade issue that is outside the jurisdiction of the WTO. the official added.
“New Delhi is not in favor of further extension of e-commerce moratorium period. MC13 is unlikely to do so. Those calling for moratorium will tell us its scope and all that it covers. Only then can we decide whether there is a need for it,” said a person close to the negotiations. business line.
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Also read: Reconsidering zero tariffs on electronic transmissions, which hurt poor countries: India and South Africa tell WTO
According to a 2017 study by UNCTAD, the moratorium costs developing countries an estimated $10 billion in revenue losses each year. In India's case, that could be more than $500 million annually.
Studies and reports analyzing the scope of the moratorium indicate that the moratorium includes physical goods that have been digitized over a period of time due to advances in technology, the official added. “For example, books and movies that were previously available in the form of physical copies, cassettes, or CDs are now available as intangible assets. Services provided digitally are also covered. “There are other interpretations. Supporters of the moratorium need to explain the scope to us so we can make informed decisions,” the official said.
Based on the UNCTAD study, it is assumed that the scope of the moratorium is on digitalized products, in which case developed countries, which are exporters of such products, will be forced to do so at the expense of developing countries, which are importers. They are benefiting from the moratorium, the official added.
WTO members have agreed not to impose tariffs on electronic transmissions since 1998, and that moratorium has been regularly extended at successive ministerial meetings.
- WTO MC 12: India calls for reconsideration of tariff suspension on electronic transmissions
A China-led group of 130 countries is promoting the Investment Facilitation for Development (IFD) proposal.
The proposed Investment Facilitation Agreement for Development (IFD), an initiative of 130 countries with China as one of the leaders, is strongly opposed by India. The proponents want to pass the proposal to the WTO's Annex 4, under which it would be binding only on signatory member states, but India said it would be an unwarranted change in the scope of the multilateral forum. I think it may lead to.
“The Ministry of Economy and DPIIT are considering this proposal. There are problems with the appeals and review mechanism, where the government is supposed to consult investors on investment-related policies. It infringes on policy space. We will do so,” the official said.
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