India to oppose continuation of moratorium on customs duties on e-com trade at WTO meet

What is the News?

India will strongly oppose the continuation of the moratorium on customs duties on e-commerce trade at the World Trade Organization(WTO)’s 12th Ministerial Conference (MC12) in Geneva, Switzerland.

What is the E-transmission Moratorium?  

WTO members have agreed not to impose customs duty on electronic transmission since 1998 and the moratorium has been periodically extended at the Ministerial Conferences, which is the highest decision-making body of the WTO.

The moratorium is on digitizable products like photographic films, cinematographic films, printed matter, music, media, software and video games.

The validity of the current extension on the moratorium is up to the 12th ministerial which will be held in June 2022 in Geneva, Switzerland.

What will be India’s stand on E-transmission Moratorium?

At the 12th Ministerial Conference(MC) in June 2022, many WTO members are seeking a temporary extension of the moratorium till the 13th MC, but India does not want this time to continue this further.

India and other countries like South Africa on several occasions have asked the WTO to revisit the issue and have highlighted the adverse impact of the moratorium on developing countries.

Why is India opposing the extension of the E-transmission Moratorium?

India is witnessing an exponential rise in imports of electronic transmissions, mainly of items like movies, music, video games and printed matter, some of which could fall within the scope of the moratorium.

Allowing the moratorium to lapse is important for developing nations like India to preserve policy space for their digital advancement, to regulate imports and generate revenue through customs duties.

For instance, it has been argued that the percentage of customs revenue lost due to foregoing duty on e-transmission for developing nations is 4.35% while that of the developed countries is a mere 0.24%.

Moreover, it has been estimated that India loses about $500 million annually due to the E-transmission Moratorium.

Source: The post is based on the article “India to oppose continuation of moratorium on customs duties on e-com trade at WTO meet” published in The Hindu on 31st May 2022.