India is a signatory to the Information Technology Agreement (ITA) (now also known as ITA-1), a plurilateral agreement of WTO. As on date, there are altogether 75 member signatories, including 27 EU member countries, accounting for about 97 percent of the world trade in Information Technology (IT) products. India joined the ITA on 25th March 1997.
During the last year, some of the developed country members of the ITA – USA, European Union and Japan- have again proposed in the ITA Committee meetings to broaden the scope and coverage of the ITA (it is being referred as ITA-2). These proposals basically relate to increasing the coverage of IT products on which customs duty would be bound at zero; addressing non-tariff measures; and expanding the number of signatory countries to include new signatories such as Argentina, Brazil and South Africa.
Proponents of ITA expansion have prepared a consolidated list containing IT products (combining products of interest of all proponents of ITA 2), on which tariff reductions are being sought has been prepared and circulated amongst WTO members. Same is under active discussions in the WTO these days.
India’s experience with the ITA has been most discouraging, which almost wiped out the IT industry from India. The real gainer from that agreement has been China which raised its global market share from 2% to 14% between 2000-2011.
In light of recent measures taken by the Government to build a sound manufacturing environment in the field of Electronics and Information Technology, this is the time for us to incubate our industry rather than expose it to undue pressures of competition. Accordingly and also keeping in view opinion of domestic IT industry, it has been decided not to participate in the ITA expansion negotiations for the time being.