The dispute settlement body of the World Trade Organisation (WTO) has accepted the request of Chinese Taipei and Japan for setting up panels in an ICT tariff case against India, an official source said. The panels would determine whether India's customs duties on imports of certain information and communications technology (ICT) products infringe WTO norms or not.
"Yes, the WTO dispute settlement body has agreed to set up the panels as requested by Chinese Taipei, and Japan in a meeting today. This was the second request of these countries," the source added. Both Chinese Taipei and Japan have filed separate requests for the establishment of a dispute panel.
Earlier, India had blocked the first request of these two countries for setting up a dispute settlement panel at the WTO. According to the trade dispute norms of WTO, if a request comes for the second time, the panel is formed.
In May last year, both the countries filed a case against India in WTO over the import duties imposed on certain electronic goods, including telephones for cellular networks; machines for reception, conversion and transmission or regeneration of voice, images or other data; and parts of telephone sets. They alleged that imposition of import duties on these products by India infringes WTO norms as India has committed zero per cent bound tariffs on these products. India strongly opposed these allegations.
While bound tariffs or duties refer to the ceiling over which a WTO member country cannot impose import duty, the applied tariff is the duty which is currently in place. India has stated that these ICT products are part of WTO's Information Technology Products (ITA-2) agreement, and New Delhi is not part of this pact. India is a part of ITA-1, signed in 1997.
According to the minutes of a meeting of the dispute settlement body held in February and March, India had stated that it was fully committed to ITA-1 and had been abiding by it over the years. India reiterated that it had not intended to commit, and would not commit, to any obligations beyond the scope of India's ITA-1 commitment and it has maintained that the products arising out of technological progression could not be covered under ITA-1, as per the the minutes of the meeting.
A WTO member country can file a dispute if it perceives that another country's trade policies or actions are violating global trade norms and impacting their local industry. According to the global trade rules, seeking consultation is the first step of the dispute settlement process. If the bilateral consultations do not result in a satisfactory solution, the complainant can request WTO to set up a dispute panel to pass a ruling on the matter.
In this case, as the consultations have not yielded positive results, Japan and Chinese Taipei had approached the WTO to set up the panels. Even after the panels are formed, it would take about 1-1.5 years to come with the ruling. Due to the COVID-19 pandemic, the passing of the ruling may take more time.
Even if the panel rules against India, New Delhi can challenge that in the WTO's appellate body, which is not functional since December last year.