WTO and India

WTO moratorium on e-commerce customs duties

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : WTO moratoruim on E-commerce

  • India and South Africa have asked the WTO to revisit the issues related with moratorium on customs duties on e-commerce trade, which is expiring in December this year.

WTO moratorium

  • Since about 75 countries, led by developed country members, have launched pluri-lateral talks on e-commerce at the WTO.
  • It is a good time for developing countries to discuss common concerns related to e-commerce.
  • The member countries will brainstorm on straightforward matters such as whether binding rules on e-commerce could result in concrete gains for poorer countries.
  • In addition, nuanced issues, such as the possibility of developing nations influencing the outcome of negotiations, will also be explored.

Why scrap WTO moratorium?

  • The existing industries and tariffs play an important role in protecting infant domestic industries from more established overseas competitors until they have attained competitiveness and economies of scale.
  • According to industry experts, India wants an end to the moratorium and imposition of import duties to protect domestic industry and revenue.
  • Since 1998, the moratorium is being extended time and again for two years.
  • The potential tariff revenue loss to developing countries is estimated at $10 billion.
  • The moratorium will negatively impact the efforts of many developing countries, which are laggards as far as digital industrialization is concerned, to industrialize digitally.

Impacting digital industry

  • Customs duty-free imports of digital products may also hinder the growth of the infant digital industry in developing countries.
  • This will also negatively impact digital industrialization, local employment creation and erode trade competitiveness of small and medium enterprises (SMEs) in developing countries.
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments