WTO panel rules against India in IT tariffs dispute

World Trade Organisation (WTO) panel has decided that India violated global trading rules in a dispute over import levies on IT products with the European Union (EU), Japan, and Taiwan.

What was the situation?

  • The disagreement centred on India’s imposition of import taxes ranging from 7.5% to 20% on a wide range of IT items, including mobile phones, components, and integrated circuits.
  • In 2019, the EU, Japan, and Taiwan protested these import taxes, claiming that they exceeded the maximum rate permitted under global trade laws.
  • The WTO panel’s latest judgement determined that India had violated these rules and recommended that India put its measures into compliance with its responsibilities.

WTO Panel’s Ruling

  • The World Trade Organisation panel decided that India breached global trade norms by applying these import taxes.
  • The panel suggested that India bring these steps in line with its commitments.
  • While the panel mostly supported India’s allegations, it rejected one of Japan’s arguments that India’s customs notification lacked “predictability.”

Consequences of the decision

  • According to the European Commission, the EU is India’s third-largest commercial partner, accounting for 10.8% of overall Indian trade in 2021.
  • The verdict may have ramifications for India-EU trade relations, as well as Japan-Taiwan relations.
  • India may be forced to reduce or eliminate the contested import taxes.
  • It remains to be seen whether India will appeal the decision.
  • If that happens, the case will be stuck in legal limbo because the WTO’s top appeals bench is no longer operational due to US objections to judge selections.

@the end

  • The tribunal suggested that India bring such measures in line with its commitments, and it is unclear whether India will challenge the verdict.
  • The case underlines the necessity of following global trading norms and the function of the World Trade Organisation in settling trade disputes between countries.
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